6 Yearly Housekeeping Tasks for LLCs and Corporations

New business owners form business entities, either corporations or limited liability companies (LLCs) to protect themselves from liability for the company’s debts. In order to keep that limited liability protection, you need to create certain documents and do certain filings every year.1. If you are a corporation or an LLC, you need to file an annual report with the State of New Jersey Division of Revenue or other state in which you incorporated. In New Jersey, it must be done online and is due by the end of the month in which you originally incorporated. For example, if you incorporated or formed your LLC on January 15, 2015, you must file your annual report by January 31, 2016. The filing is done to keep the Division of Revenue up-to-date about the company’s mailing address, the officers and directors or members, and the name and address of the registered agent. There is a filing fee that must be paid when you file your annual report. If you are authorized to do business in more than one state, you need to file your annual reports in each state in which your company is authorized to do business and pay the required fee.

2. In addition, all corporations must have annual meetings of their shareholders and board of directors. Even if you are the sole shareholder and the sole director, you need to have these annual meetings and should have written minutes of each meeting to prove that it took place.If your business entity is an LLC, you are not required to have annual meetings of the members but it is good practice to do so. You want to show the world that the LLC is separate and apart from you personally, so the more actions you can take to prove that the company is being run by you or your partners in a way that is different from a sole proprietorship or partnership, the better your chances of not being personally sued if your business is sued. Again, even if you are the sole member, create written minutes of a “meeting” that you have to ratify the actions of the “managing member” in the previous year and keep the minutes with your other business formation documents. Having written minutes of your meetings is very helpful if the company is sued.3. You should check your stock ledger once a year to make sure that all stock certificates that should have been issued have been issued, all stock certificates that reflect a transfer of ownership show those changes and the stock ledger is current. That way, anyone looking at your company’s books knows who owns the company.4. If your company is in an industry that requires licensing, make sure that everyone that needs to be licensed has a current license. There is great liability to your company if an unlicensed person acts on behalf of the business.5. Make sure that your company has workers compensation insurance. If your business is a corporation, even if there are no employees and you are the only director or officer, the company must carry workers compensation insurance. Workers comp is not required if your company is an LLC, has no one performing services for the LLC except you as the sole member.

6. Finally, make sure that your company files all of the necessary tax filings. Check with your accountant to learn if you are required to collect and forward sales taxes, payroll taxes, or any other kind of tax.Keeping your company in good order and up-to-date with all of its requirements keeps your business from incurring unnecessary fees and liabilities. You will need good documentation (kept in a place where you know where everything is located) if you are getting financing, getting audited, selling your business, or if you need to be away from your business for a period of time. If you need help with these tasks, consult with a professional.

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