Whether you’re working with a team to create a robust e-commerce website or build a stronger social media presence, running a small business means managing many moving parts. As a small business owner not only do you have to ensure the business is continuing to grow, but you must stay on top of the latest regulations to keep the business in compliance to remain in good standing at the state and federal level.
What is business compliance
Business compliance can mean different things depending on the size of your business. Generally, compliance means that a business adheres to government laws, health and safety standards, and security requirements. If a small business doesn’t stay compliant it could face major legal disputes or criminal charges under the law. Staying legally compliant also ensures your small business maintains a reputable public image. Since customer trust and loyalty is everything to your small business, it is important to take compliance seriously each year.
4 business compliance items to consider
While the process of business compliance may seem daunting, this small business compliance checklist offers you guidance on what responsibilities you may need to prepare for with the end-of-year compliance.
1. Report changes to the state via Articles of Amendment
Depending on what state your business resides in, you may be required to report the following changes to your state or local government, including:
- Added or changed locations
- Added or changed lines of business
- Changes to your business name
- If the business underwent a change in ownership (i.e., owner(s) have left or new members have been added to ownership).
You must report any of these important changes to your business with something called Articles of Amendment. If this is applicable to your business, you should discuss this process of reporting an amendment further with an attorney.
2. Hold an annual meeting
Another way your small business can stay compliant is by holding an annual meeting. You may hold an annual meeting for a variety of reasons, including sharing the status of the business, appointing members to the board of directors, reviewing financial information, and discussing the goals of the business. During the meeting, ask a team member to draft meeting minutes to document the discussion. Keep the meeting minutes on file in case the business needs the notes for reference.
Not every state requires an annual meeting, especially for a limited liability company (LLC). However, an LLC’s operating agreement might have language that makes this mandatory. If you’re unsure what the requirements are for having an annual meeting, then discuss with your attorney or another legal professional.
3. File annual reports with the state
Each state has its own laws and regulations, as well as varying requirements for what to include in the annual report. Here are a few examples of you may need include in the annual report:
- Your business address
- The name and/or addresses of managers and members of your business
- Important identification numbers for your business (i.e., your state entity number)
- The purpose of your business
- A list of authorized signatories
The reporting schedule and required fees can also vary by state. Make sure to send in your annual report to the state on time. Otherwise, you could be slapped with a late fee, penalties and/or extra taxes. Some states could even dissolve your business license. Check the compliance requirement in your state for the most up-to-date information or talk with your attorney.
4. Review licenses, permits and recertification
Depending on your small business and location, you may be asked to renew licenses, permits and certification to stay legally compliant. For example, you may need to regularly renew sales permits, especially if you sell food and beverages. For professional services like plumbing or electric, the state may require a certification with a third-party board to keep your license. Renewal requirements can vary, so it’s best to check with the local business licensing offices.
Taking care of your small business compliance
In order to keep your business in good standing with the state and federal government, it’s important to take compliance seriously. Talk with your business attorney or legal professional for expert advice on business compliance.
For other small business resources from CenturyLink, check out topics on how to build a small business continuity plan and tips on how to manage your business in a post-pandemic world.