New Year’s Resolutions to Get Your Business’ Legal Matters in Order

By on January 7, 2019
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It’s a new year and there’s no better time to ensure your business is on the right track. The beginning of the year is always a busy time, but addressing legal obligations will save you money by avoiding fees and penalties. Make a determined effort to put your legal house in order to meet threats ahead and protect your business operation.

Here are some New Year’s resolutions to help you ensure your business is legally fit for 2019:

1. Review Your Business Plan

It’s a new year, and as a business owner you see 2019 as a year of opportunity filled with growth and success. The first thing you should do to ensure that happens is review your business plan. What areas experienced success? What areas need work? Create a plan to work on those areas that need the most attention and examine new business opportunities for the coming year.

If you were on the ball and filed for incorporation before the end of 2018 or the delayed date of January 1st, the business won’t need to file separate tax returns for the unincorporated entity and your new C-Corp, S-Corp, or LLC. Having the same business structure for the entire year simplifies things at tax time. If incorporation wasn’t in your plans for 2019, consider if it should be for 2020 and include that in your business plan. You don’t want to miss the deadline, which conveniently comes at the busiest time of year.

2. Report Company Changes

If significant changes to your business occurred before the end of 2018, such as incorporating, changing your business name or address, or changes in shareholders or board members, you should file an official “articles of amendment” with the state and the IRS. It’s easy to forget this step, but it’s important to keep your business in good standing.

3. Review Estimated Taxes

Your final 2018 tax payment is due January 15th, which is right around the corner. It’s important to look at your 2018 earnings and assess estimated tax payments to avoid overpaying or underpaying. Even if your business doesn’t run on a calendar year, you should still organize your tax records and supporting documentation such as canceled checks, credit card slips, invoices, charitable donations, travel receipts, etc.

4. Review Permits and Licenses

Many permits and licenses require annual renewal. Take inventory of your state and local permits and licenses and be sure not to let them lapse. It may be helpful to put someone in charge of keeping up on the renewals if you’re too busy. You don’t want to be paying late fees or fines because you missed a deadline.

5. Perform A Security Audit

If you haven’t thought about your company’s security measures in a while, the new year is the perfect time to ensure your business data, and any customer and vendor data, is protected. In the past year, we have seen targeted attacks against large companies like Adobe and Target. It’s even easier for cybercriminals to target small and medium-sized businesses that may not have sophisticated security measures in place. Don’t ever assume your business is under their radar.

Educate yourself and your employees on cybersecurity and potential threats, and look to experts to help you ensure you have appropriate measures in place. Implement a damage control plan in case of a security breach. Also, have your IT staff consult with legal staff to ensure your security measures address any legal concerns. The security measures you implement should be legally defensible, which means you must be able to justify them in court, if necessary. A company may find themselves in court over a security breach or failure to comply with the many legal requirements imposed to manage security risk.

6. Revisit Your Social Media Strategy

Did your activities on Facebook, Twitter, and LinkedIn serve you well last year? Are you thinking of branching out to YouTube and Pinterest this year? Before you commit to a new strategy, calculate your return on your investment for 2018. If you find that your efforts indeed translated to sales, you can increase your social media budget for 2019. If it turns out your ROI isn’t as great as you thought, consider revamping your strategy. If you do not yet have a strategy, familiarize yourself with the top social media platforms: Twitter, Facebook, LinkedIn, YouTube, Pinterest, and Instagram to see how engaging with the right communities can help you grow your business.

Your social media strategy is definitely important for marketing and sales. However, you must also ensure employees in charge of posting on behalf of the company understand the legal ramifications of using social media platforms. Social media sites are merely service providers. If data your business used (on the site) is compromised, it can lead to administrative fines, liability claims, and criminal charges. It’s important to educate your employees on what content should and should not be posted to ensure they do not commit acts of libel, copyright, or trademark infringement, knowingly or unknowingly. Implementing a formal policy and procedure around social media is one way to ensure employees understand the importance of proper use.

7. Improve Efficiency Via Technology

Many businesses aren’t as efficient as they could be because they do not fully utilized the technology they currently own or that is available to them, especially small businesses with no expert guidance. This year, consider getting help in areas where you lack in-house expertise. No IT department? Look for a security firm to help you with data security. No in-house marketing? Consider a marketing firm to help revamp your website, rebrand, or boost your social media presence. Everything from keeping your inbox organized to automating accounting functions to accepting mobile payments can be handled with the right technology. You just have to know what works for you and your business. Also, getting expert advice will help ensure you are meeting the legal obligations associated with these areas, i.e. data security.

8. Get It In Writing

In 2018, roughly 40% of small businesses reported having legal issues with contracts. Either negotiation went awry or they were unable to collect payments. No matter what size your business, make sure you get all customer and vendor agreements in writing to avoid such issues. It’s imperative your contracts be legally binding, so contact a lawyer to review them.

9. Hire A Lawyer

Obtaining legal advice can save you a lot of money in the long run, and could be the difference between success and failure. If you cannot afford to retain a lawyer, you can at least make good legal contacts you can call on or find online legal services that can help you for reduced costs. Ensure whomever you choose is familiar with local, state, and federal laws in the area your business operates.

Resolving to meet legal obligations doesn’t have to be burdensome or costly. Not meeting them, however, can be very costly and put your business at risk. With a little advanced planning and expert advice, you can feel confident your business is legally prepared and concentrate on the growth and success of your business in the new year.

With a strong legal safety net you can stick to your resolutions and take steps throughout the year to protect your business and keep ahead of legal threats to your operation in 2019.

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