[IMGCAP(1)]As an accountant, you’re a pro at helping your clients understand the legalities of running a business. But are you doing enough to make sure your own business keeps up with all the federal, state and local regulations required to stay in good standing?
During the daily sprint of running a business, it’s not uncommon for certain administrative tasks to take a back seat to meeting client deadlines and hustling for new accounts. To that end, here are five compliance tips to help keep your own accounting business on track:
1. File your annual report with the state.
Depending on where you live and work, you may have structured your business as an LLC (Limited Liability Company), PLLC (Professional Limited Liability Company) or corporation. In most states, you’re required to file an annual report or Statement of Information for each of these business entities. These reports help make sure the state has general information about your business and can see that it’s still operating. A modest fee is usually associated with this report as well.
First, you should determine if your state even requires you to file an Annual Report. Then, figure out how often you need to file. The term “annual report” isn’t always accurate, as some states have biennial filings. You’ll also have to check the filing deadline for your state: It might be a set date for all businesses (for example, April 15) or the anniversary of your business formation. You can learn all this information from your state’s Secretary of State Office or check with an online legal filing service.
Once you know your requirements, be sure to get this paperwork in on time. Missing a deadline or two may cause the state to place your company in bad standing (meaning you could lose your liability protection). The Annual Report is a very simple form, so there’s no excuse not to do it!
2. Keep the state informed of any major changes.
Along with filing your Annual Report, it’s good practice to notify your state of any major changes to your business information, such as moving to a new location or adding or removing a board member. In most states, this form is called “Articles of Amendment.”
Why is this important? On the off chance your business is sued, the plaintiff may try to argue that you haven’t maintained your LLC/corporation to the letter of the law and pierce your corporate veil. Don’t risk your compliancy or liability protection by having out of date information filed with the state.
3. Keep up with your Registered Agent service.
When you formed an LLC or incorporated your business, you may have decided to use a Registered Agent service for your official mailing address. If this is the case, you need to make sure that you keep up with any required service fees. For example, you may have been entitled to one year of a free Registered Agent service and then forgotten to renew the service after the one-year term expired.
What happens then is the Registered Agent stops representing you and sends any official mail back to the state. The state then realizes it doesn’t have your business’s current address and puts your LLC or corporation in bad standing (and again, you risk your personal liability protection).
4. Get your business names in order.
It’s common to incorporate a business under an official name and then use more casual variations in day-to-day business. If you ever conduct business with a name that’s different than the official name filed in your LLC or incorporation paperwork, you need to file a DBA (Doing Business As, or also called a Fictitious Business Name) with your local entity. This is required no matter how minor the name variation might seem to you.
5. Keep up with your license and continuing professional education.
As you know, your CPA license is valid for a certain time period, as specified by your state licensing board. For example, in California, a license is valid for two years and expires every other year at midnight on the last day of your birth month. If you’re not certain about your state’s licensing renewal terms, check with your state board or NASBA’s website. Many state licensing boards also require you to maintain and improve your skills through CPE (continuing professional education) courses. Requirements vary from state to state; you can check out NASBA’s Learning Market for the specifics in your state.
The bottom line is there are several administrative tasks to keep your business structure and license in good standing. None are particularly complicated or time-consuming, but all are crucial to keeping your business legit and your personal liability intact. In the course of running your business and helping your clients navigate their own compliance requirements, don’t forget to make time throughout the year to get your own legal ducks in a row.
Nellie Akalp is a passionate entrepreneur, small business advocate and mother of four. As CEO of CorpNet.com, a legal document preparation filing service, Nellie helps entrepreneurs start a business, incorporate, form an LLC, set up sole proprietorships and DBAs, and maintain a business in compliance with state filing requirements for a new or existing business.
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