5 Legal Issues Your Business Needs to Deal with Before 2012

The charcoal is barely cooled from Labor Day barbecues, and thankfully the only holiday merchandise in stores (yet!) is for Halloween. But if you’re a small-business owner, it’s never too early to make sure you have everything squared away for the New Year.

That's especially true for your legal obligations. When it comes to some legal decisions, waiting until you write your New Year’s resolutions will be too late to deal with them effectively. 

Here’s a snapshot of some of the things your small business should deal with before the calendar hits 2012:

1. Think about incorporating a new business before 2012. If you started a new business in 2011 and still haven’t gotten around to incorporating or forming an LLC, you might want to do so before 2012. 

Bear in mind that the “start date” of your corporation isn’t retroactive. So, if your corporation forms on Nov. 1, you’ll still need to file your taxes as a sole proprietor/partnership for January 1 to October 31, 2011 and also file as a corporation for November and December. For this reason, many business owners want to wait until January to incorporate or form their LLC.

January, however, is absolutely the busiest time of the year for a secretary of state’s office. In short, waiting to file until January puts you at the mercy of whatever backlog exists. 

There’s another option, and that’s selecting a "Delayed Filing" option with a document filing company. With this option, you can get all your paperwork submitted now, and it will be held and filed on the first business day of 2012 -- putting you at the front of the line.

2. Make sure you file your annual report for your corporation. Most states require some form of an annual report filing (some every year; some every two years). If your state requires you to file this report, there is a specific due date for filing each year. In some cases, it's on the anniversary of your business' incorporation date; in other cases, it's when your annual tax statements are due; and in some other cases, it's at the end of the calendar year.

Be sure to know your specific filing deadline (check with your state's secretary of state office). Missing this deadline can result in penalties and late fees — and in a worst-case scenario, your corporation can be subject to suspension or dissolution. 

3. Did you make any changes to your corporation? File your Articles of Amendment. If you made any changes to your business -- for example, changing your business address, dropping the .com from your official company name, or authorizing more shares -- you’ll need to file an official notification with your state of incorporation. In most states, this paperwork is known as “Articles of Amendment.” 

4. Close any inactive businesses. Did you incorporate a venture a few years ago, but your focus has since turned elsewhere? Even if you’re not actively promoting the business and it has no revenue for the year, you still need to file a formal termination of that LLC or Corporation. Otherwise, you can still be charged fees associated with the business, you’ll still be expected to file an annual report, and you’ll still need to submit tax returns to the IRS and state. 

Before 2012, you should file Articles of Dissolution or a Certificate of Termination document with the Secretary of State in the state where your corporation or LLC was formed. In most cases, you'll need to settle any taxes owed before you can do this.

You should also cancel any related permits or licenses you hold with your state or county. And if you've been using a fictitious business name, you'll need to file an abandonment form. Again, make sure to take care of these matters before the end of the year. There's simply no reason to pay an extra penny in fees toward a business you know you're retiring. Put that money towards your next venture instead!

5. Tie up any legal loose ends. The last quarter of the year presents a perfect opportunity to tie up any loose ends you’ve been putting off. Do you need to file a DBA (Doing Business As) for your business name? Do you need to file for a trademark? Did you get a Tax ID number (or Employer ID Number)? Are all your necessary licenses and permits in order? 

The next few months will be busy, so set aside some time to address your administrative obligations. Taking care of certain issues in 2011 can help you to avoid unnecessary fees and penalties moving forward. And at the very least you can cross a few more things off your list to start fresh in the New Year.