As an entrepreneur, it’s always important to start the year with clear goals, an action plan and a moment to reflect on what you’ve learned in the past year. With all that’s on your plate, the legal side of things is often pushed to the side. This short checklist will help you quickly review some critical legal compliance issues, so you can get back to focusing on your success in 2016!
1) Review Important Contracts
First things first - identify your ‘big’ contracts. This may include important license agreements, supply contracts, consulting agreements and business leases. Comb through these documents and make sure you know when they expire and the conditions to renew.
Renewal clauses often have requirements that need to be met before the contract expires. For example, business leases typically require that you provide up to six months’ notice of renewal before the term expires. If you miss the deadline for notice, you could lose your renewal rights and be forced to leave at the end of the term.
Once you’ve identified the terms of renewal and the expiration date, mark them in your calendar to ensure that you have plenty of time to renew (or cancel) the contracts in compliance with the terms of the agreement.
2) Consider Incorporating
Many small business start out as sole proprietorships. But as your business grows, there are added incentives for you to incorporate. As we’ve discussed before, for Ontario businesses here and Alberta businesses here, the primary reasons to incorporate will be to limit personal liability and take advantage of business tax rates. Generally, it’s never too early to incorporate and it’s a fairly simple and inexpensive process. So consider whether 2016 is the year that you take the incorporation plunge.
3) Check Your Corporate Records
Keeping your corporate records up to date is one of the ongoing requirements of ensuring your corporation is legally compliant. This includes filing Annual Returns and preparing Annual Resolutions.
If the registered office for your business is also your everyday business address, then you will receive the Annual Return form directly at your place of business. Make sure you spend the time to review, properly complete, and file with the appropriate regulatory body.
Annual Resolutions are resolutions that are completed at the same time you file your Annual Return. They include confirmation of the filing of your Annual Return, as well as other items, including the waiving of the requirement of an audit if applicable.
If you’re not sure where to start with getting your corporate records organized, you can always contact Law Scout. We respond to requests within one business day (often much sooner) and we’re always happy to connect entrepreneurs to Law Scout’s network of highly-qualified small business lawyers.
4) GST/HST Number
If you haven’t registered for a GST/HST Number for your business, then you should consider registering. Although registration is only mandatory if your business’s taxable income is over $30,000.00, registering early may prove to be beneficial as you can claim input tax credits on GST/HST paid on business expenses.
More information about registering for a GST/HST Number can be found here.
5) Other Corporate Filings
Have you moved business offices? Then make sure to file a Change of Address form with the appropriate regulatory body.
Do you want to change the name of your business or the share structure of your corporation? Then you will need to file Articles of Amendment. When filing Articles of Amendments, you should make sure that your amendments comply with your corporation’s Bylaws and any Shareholders Agreement.
An ounce of prevention is worth a pound of cure. Which is why it’s important to start 2016 off right by taking a moment to reflect and ensure that your business is set up for success in 2016. If you have questions along the way or are considering hiring a lawyer but don’t know where to start, send us an email at firstname.lastname@example.org and we’ll be happy to set you on the right path.
In the end - keep on hustling and make 2016 your best year yet!
Our thanks to Derek Hopfner for letting us re-post his article. It was originally published at Law Scout
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