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Published on Mar 9, 2019
As we enter a new year, it’s time to evaluate what worked and what needs improvement.
Even home-based businesses require business licenses, most of which require periodic renewal. Establish a New Year tradition of auditing your license requirements. Is the information provided when you applied for the license still current, or are updates needed? Will you need additional licenses because of expansion plans? Tracking down license requirements can be a nuisance, so you may want to take advantage of BizFilings' Business License Wizard.
Are you doing business in multiple states or expanding into new territories? Are your annual reports up for renewal? There is no standard filing due date. It can be easy to miss an annual report filing, particularly if your business operates in more than one state. Some states have a fixed date for all businesses, but others base the due date on the incorporation, formation, or qualification date. Additionally, you can’t rely on the state to remind you as many have done away with annual reminders. If you only do business in your home state, you may be able to keep track of things yourself, but businesses with multiple reporting requirements may want to look into retaining compliance professionals. Failing to file an annual report is the primary reason that a business will lose good standing with the state.
Every corporation or LLC is required to have a registered agent in each state it’s registered to do business. A registered agent may also be necessary if you are doing business overseas without being incorporated. Your registered agent receives important legal documents like service of process, and important communications from the state filing office. The registered agent’s name and address are on file with the state and available to the public. If the name and/or address of the registered agent on file is inaccurate your company can be subject to penalties. Furthermore, if service of process is not received by the company, there can be serious legal consequences. Therefore, if you already have a registered agent, now is a good time to do a quick audit to be sure the state’s records are up to date. It’s also a good time to make sure your current registered agent will be able to act in that capacity for the long term - and if you are expanding into new states to choose a registered agent who can serve your needs. It’s also important to note that the state records require updating when the registered agent or address changes. This involves paperwork and possibly a fee. (And if you forget to do it, your company can be subject to penalties.)
Lenders sometimes require good standing status in order to approve new financing. They generally view a loss of good standing status as an increased risk. Official documents of your company’s standing may be necessary when registering a foreign business. Being in good standing helps your company save money and more easily do business with others. Make sure to check your company’s standing on a periodic basis.
Thriving businesses are built by the good habits that owners choose to engage in on a daily basis. Resolve today to audit your company’s licensing status, annual report filings, registered agent choice and standing.
Making these habits part of your quarterly routine will get your business in top shape, and place you well on your way to managing a successful business for many years to come.