Business Resolutions for 2022

The popular sentiment is that New Year’s Resolutions are best kept at the beginning of the year and begin to wain soon thereafter. In order for resolutions to sustain, new habits must be formed, periodic reviews of progress undertaken, and commitments to institute the resolutions reaffirmed. So, let’s see how you are doing so far on your 2022 resolutions to address some of the often delayed (and sometimes forgotten) requirements of owning and operating a small business. How many of the following resolutions can you check off as either in progress or completed?

• Hold annual meetings of the shareholders and directors, or managers and members, of the business and prepare minutes of those meetings promptly.

• Prepare minutes for past meetings that have been held, but which have never gotten into the minute book.

• Review and revise standard forms of contracts, invoices, terms and conditions, and other documents to assure that they are up to date and adequate to accomplish the purposes for which they are used.

• Protect the intellectual property of the business by implementing a system to protect trade secrets, by requiring employee confidential information and invention agreements, and by registering and maintaining copyrights, patents and trademarks.

• Deliver annual reports, financial statements and tax preparation information to the shareholders and members promptly after year-end

• Update records of shareholders’ or members’ information and have those lists available at the principal place of business.

• File Notices of Transaction under Corporations Code section 25102(f) (or other appropriate filings) with the California Department of Financial Protection & Innovation regarding issuances of securities to shareholders or members, and make any similar filings that may be required with the Securities and Exchange Commission.

• Meet with equity holders and agree upon a buy-sell arrangements so that efficient transfers of ownership may take place when an equity holder withdraws, dies or otherwise desires to sell an ownership interest in the business.

• Meet with an insurance agent to discuss the adequacy of insurance coverages and, in particular: (1) key man life insurance to fund potential buy-outs of equity holders under the buy-sell agreement and (2) employment practices liability insurance.

• Meet with an accountant to discuss: (1) tax return preparation (before the eve of the filing deadline) and (2) the adequacy of current accounting methods, policies and systems.

• File federal and state income tax returns, sales and use tax returns, and property tax returns before their respective due dates (without extensions!).

• Adopt or update an employee handbook to reflect current employee policies and benefits and to address the latest labor and employment law requirements, and post updated posters and notices to employees as required by state and federal law.

Congratulations if you are still on track with your business resolutions for 2022. For those matters that have not yet been addressed, what is holding you back? Is it a lack of information or expertise? If so, seek out mentors or professional advisers who can help get you moving in the right direction. Resolve now to reach out to the professionals at Poole Shaffery & Koegle, LLP to assist you with the open legal matters on your checklist.