Once you have started your business, you still need to keep up with certain recurring requirements to make sure that you are legally compliant. Some of these requirements relate to the internal management of the business, while others involve submitting paperwork to the federal government and your state government. You also will want to make sure that you stay current with any licenses or permits that you need to renew, and you may need additional licenses or permits if your business expands or changes.
These will depend in large part on the business form that you have chosen. For example, an LLC or a corporation will have different requirements from a non-profit or a partnership. You should keep thorough records of your compliance with these requirements. They may become relevant if your business is sued, since part of the plaintiff’s claim may allege that you failed to meet requirements. Also, if you choose to sell your business, you may find it easier to attract a buyer if you can show them that there are no hidden problems that they will be inheriting.
If you are running a corporation, you will need to make sure that you issue stock to shareholders, document any stock transfers, and hold director and shareholder meetings on an annual basis. You also will need to create bylaws and adhere to them (or amend them) over time. Most other business forms do not have such strict internal requirements, although owners of LLCs need to hold annual meetings, issue shares, and document transfers of interest. They also need to adhere to their operating agreement and record any changes to it.
Even if a record of a specific decision is not required under the law, it may be helpful to document it for future reference and to avoid disputes down the road.
For the most part, your obligations toward the federal government consist of paying taxes to the IRS, which include both income taxes and employer taxes. If you have 50 or more employees, you will need to comply with the Affordable Care Act by reporting that you provide health coverage to the IRS.
State requirements can be more specific than federal requirements. As with internal requirements, they tend to vary according to your business form and your state. In general, you will need to issue an annual or biennial report on a certain date, which will involve paying filing fees. If you are running a corporation or an LLC, you should find out whether you need to pay a franchise tax to any state in which you are operating. The state probably will need to receive a record of any major changes to your business, such as if you are changing the name of the business or its location. You can use articles of amendment to notify the state about changes.
Licenses and Permits
Be sure to confirm renewal requirements with the entity that awarded each license or permit.
Getting licenses or permits from state or local governments is an important step to take when forming your business, and making sure that you stay current is just as important. The scope of the licenses and permits that you need will depend on the degree to which your industry is regulated. For example, a liquor store may need to be especially alert to keeping its license current, and a restaurant probably needs to conduct regular safety inspections so that it can renew health and safety certificates. Sometimes a specific government agency like a state nursing board may oversee certifications in your industry.
You may need to keep up with federal licenses and permits as well, especially in certain industries. Some examples include industries related to alcohol, tobacco, firearms, aviation, and activities that affect animals or the environment.