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New Year’s resolutions for small businesses

Posted: December 25, 2008 2:23 p.m.
Updated: December 26, 2008 4:30 a.m.
 
It makes us, or it mars us, think on that,
And fix most firm thy resolution.

-William Shakespeare

The beginning of the new year is a traditional time for reflection and for the making of commitments to undertake projects and reform habits. This is especially the case for small business owners when it comes to the organizational aspects (as opposed to the day-to-day operations) of business.

So, as a time-saving benefit for the busy business owner, the following is a ready-made list of resolutions to address some of the often delayed and sometimes forgotten requirements of owning and operating a small business.

n I resolve to hold meetings of the shareholders and directors, or managers and members, of the business and to prepare minutes of those meetings.

n I further resolve to prepare minutes for all those past meetings that have been held but which have never gotten into the minute book.

n I resolve to review my standard forms of contracts, invoices, standard terms and conditions and other documents to assure they are adequate to accomplish the matters for which they are used and to protect the business. I further resolve to have those documents revised to address the inadequacies I will find.

n I resolve to protect the intellectual property of my business by implementing a system to protect my trade secrets, by requiring employee confidential information and invention agreements and by registering my patents and trademarks.

n I resolve to deliver annual reports and financial statements to the shareholders and members within 120 days after year-end (for businesses with larger numbers of shareholders or members). And, for all limited liability company members, I resolve to deliver to them tax preparation information within 90 days after year-end.

n I resolve to update my records of shareholders or members and have those lists available at my principal place of business. I further resolve to file with the Department of Corporations Notices of Transaction under Corporations Code section 25102(f) (or other appropriate filings) for my issuances of securities to my shareholders or members and to make any similar filings that may be required with the Securities and Exchange Commission.

n I resolve to meet with my co-owners and agree on a buy-sell arrangements so that we know that we have an agreement about what will happen when an owner withdraws, dies or otherwise desires to sell the owner's stake in the business.

n I resolve to meet with my insurance agent to discuss the adequacy of my insurance coverages and, in particular key man life insurance to fund potential buy-outs of an owner pursuant to the buy-sell agreement that is to be forthcoming and employment practices liability insurance.

n I resolve to meet with my accountant to discuss tax return preparation (before the eve of the filing deadline) and the adequacy of my accounting methods, policies and systems.

n I resolve to have my tax and financial information ready before my accountant asks for it.

n I resolve to file my federal and state income tax returns, sales and use tax returns and property tax returns before their respective due dates (without extensions!).

n I further resolve to timely pay my quarterly estimated taxes (including the minimum franchise tax or minimum LLC fee in the first quarter, and the estimated additional LLC fee in the second quarter).

n I resolve to adopt or update my employee handbook to reflect my current employee policies and benefits and to address labor and employment law requirements (whether currently effective or becoming effective in the new year).

n I further resolve to post all of the updated posters and notices to employees as required by state and federal law. The failure of a small business to regularly and timely address structural or organizational aspects of its operation may lead to its foundering.

A proactive approach to planning and operating your business, however, can assure that you are prepared for the future and any challenges that may be encountered along the way.

Resolve now to make your small business the best it can be.

Chris S. Jacobsen is a partner with Poole & Shaffery, LLP, a full service business, corporate and employment law firm. "It's The Law" appears Fridays and rotates between members of the Santa Clarita Valley Bar Association. His column reflects his own views and not necessarily those of The Signal.

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