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Friday, January 10, 2014

The start of a new year is a busy time for business owners. The beginning of the year is a time for closing out 2013 and making sure your business is starting 2014 on its best foot. This is a checklist to help you determine if you are legally fit for 2014.

1. Reexamine your business structure

Reexamine your business structure to see if you have outgrown it. You may want to incorporate by establishing an S-corporation or LLC if you are currently a sole proprietor. Being incorporated protects your personal assets and saves you money when you are filing your taxes. Changing your business structure at the start of a new year simplifies your taxes and accounting procedures.

2. Formally terminate an inactive business

Simply ceasing to do business with a corporation name that you have set up does not release you from the obligation of filing tax returns and paying corporation fees. You need to file a “Certificate of Termination” or “Articles of Dissolution” document to the state where your corporation was formed. Before you file this paperwork, you need to pay any business fees and taxes that are outstanding.

3. Hold an annual meeting

If you did not hold an annual meeting in 2013, schedule and hold one as soon as you can to keep your corporation in good standing. Shareholders of the corporation or members of the LLC need to meet and sign the minutes generated from the meeting. There are free samples of minutes from annual business meetings on the Internet that you can help you get started.

4. File your annual report

Keep your corporation in good standing and avoid penalties and late fees charged by the state by filing your corporation’s annual report. There is a due date for filing. Depending on the state you incorporated your business with this due date may be on the anniversary of your incorporation date, in December at the end of the year or the due date for your annual tax statements.

5. Formally record company changes

An “Articles of Amendment” document needs to be filed with your state to notify them of changes made to your company. A change in the authorization of shares, business address, or board members needs to be formally recorded. It is important to keep your paperwork up to date so that your corporation remains in good standing, and if something happens to your corporation it will not be affect you personally.

6. Reexamine your estimated tax payments

With final tax payments due on Jan. 15, 2014, you will want to make the payment and avoid fees and penalties. Now it a good time to reexamine the amount you are paying and adjust for any overpayments or underpayments you are making.

7. Reexamine your insurance coverage

If you do not have liability insurance for your business, now is the time to get it. Business liabilty insurance protects your business and its assets from damages, theft, fire, injuries and lawsuits. If you currently have business insurance, reexamine if your coverage needs are being met. You may need to add more coverage or options to your policy. It is important to consult an insurance representative to discuss insurance needs appropriate for your business.

Start your 2014 business year with all your ducks in a row. Reexamining your insurance, taxes, paperwork filings and business structure will keep your corporation in good standing, save you money and avoid penalties and fees.

Author Bio:
James Daniel writes for Insureon, a business insurance company that gives back to the community through its small business institute.

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