A New Year’s Business Compliance Checklist for Your Small Business Clients

February 26, 2019

checklist-blog

As you know, when your clients keep their financial records and tax filings in order and on-time, it can save them (and you) lot of time and spare them from headaches. To make sure that this New Year is indeed a happy one, your clients should also be aware of the ongoing compliance requirements they need to fulfill if their company is registered as an LLC or a corporation.

Completing the necessary business filings on time is critical for keeping their companies in good standing with the state(s) where they are registered. Corporations and LLCs that don’t stay compliant may face paying additional fees and penalties. Even worse, states might also revoke those companies’ “certificate of good standing,” which could mean the loss of personal liability protection or even dissolution.

How can you help your clients keep their business compliance responsibilities top of mind?

For one, encourage them to seek the advice of a licensed attorney who can tell them precisely what reports and filings they need to complete. Second, share some points that businesses, in general, should be aware of and ask their lawyers about.

6 Common Business Compliance Requirements Your Clients Should Know About

1. Notify the state of any major changes to the business.

If a business moved to a new location, added a new board member, or made another significant change, most states require an "Articles of Amendment" as notification. The form is usually concise and simple to file.

2. File an Annual Report with the state.

Most states require that corporations and LLCs file an Annual Report (sometimes called a "Statement of Information"). The frequency might be every year, every other year, or on some other timeline. The document is quite basic, and the filing fee is inexpensive. Note that this Annual Report is a different animal than the SEC-required annual reports that some of your business clients may also need to create. Annual Report deadlines and fees vary by state, and your clients can check with the state's Secretary of State office, an online legal filing service, or a lawyer to confirm when their Annual Report is due. 3. Keep business licenses and permits up to date. Most businesses must apply for state and/or local licenses and permits to operate legally. Some common examples include:

Health permit

Signage permit
Fire permit
General business license
Tax permit

If your clients aren’t sure about what licenses and permits they need and renewal requirements, they can find out by checking with their municipality, county, and state offices; consulting an attorney, or asking an online legal filing service that handles applying for licenses and permits in all 50 states.

4. Maintain a Registered Agent.

LLCs and Corporation must maintain a Registered Agent service to accept service of process for the business. These services usually require an annual renewal, so your clients need to keep this top of mind to stay in good standing with the state. Also, companies need to have a registered agent in all the states where they're business is registered. If your clients have expanded operations in additional states, they will need to have a registered agent there, as well. A straightforward solution to that requirement is to consider using an online document filing service that also provides registered agent services in all 50 states.

5. Keep current on state franchise taxes.

If you have clients in states that levy a franchise tax (for the privilege of operating there) on corporations and LLC, they won't want to let deadlines slip by them. They can find Information about franchise tax obligations and deadlines by contacting the state's Franchise Tax Board or another appropriate state office.

6. Keep business and personal finances separate from each other.

I do not doubt that you've told your clients countless times about the importance of keeping their personal and business financial activities separate so that there is no commingling of funds. If you suspect clients haven't been maintaining that separation, the start of the New Year serves as a wonderful time to remind them that law requires that LLCs and corporations keep owners' personal accounts and the business accounts apart from each other.

One Thing You Can Do to Make it a Happy New Year for Your Clients and Your Accounting Firm

After your clients have determined their business compliance responsibilities for the year, you might consider joining a program that will enable you to help them complete and file their paperwork (submitting business filings is not something that requires an attorney in many cases). I’ve recently done a webinar for accounting and tax professionals about the CorpNet Partner Program that my company offers to tax professionals and accountants. I invite you to watch it to learn more. With no membership fees to pay, you have two ways to open a new revenue stream for your business while helping your customers save time and money on their compliance filings.

Happy New Year to you!

Nellie Akalp is a passionate entrepreneur, small business expert and mother of four. She is the CEO ofCorpNet.com, a trusted resource for Business Incorporation, LLC Filings, and Corporate Compliance Services in all 50 states. Nellie and her team recently launched a partner program for accountants, bookkeepers, CPAs, and other professionals to help them streamline the business incorporation and compliance process for their clients. More info at:CorpNet.com/partners