Small Business Resolutions for 2024

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. 2024 brings a new requirement for most small businesses – reporting under the Corporate Transparency Act (the “CTA”) – as well as a number of recurring items that are often delayed (and sometimes forgotten).

So, let’s see how you are doing so far on your 2024 Small Business Resolutions. How many of the following resolutions can you check off as either in progress or completed?

• Reporting of beneficial ownership information (“BOI”) under the CTA. FinCEN has put together a Small Entity Compliance Guide to assist small businesses in determining if they are required to report and, if so, how to do so: https://www.fincen.gov/sites/default/files/shared/BOI_Small_Compliance_Guide.v1.1-FINAL.pdf. Businesses formed prior to January 1, 2024 are required to report prior to January 1, 2025, while businesses formed during calendar year 2025 are required to report within 90 days of organization. E-filing of BOI can be made on the following website: https://boiefiling.fincen.gov/.

• Hold annual meetings of the shareholders and directors (for corporations), or managers and members (for LLCs), 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.

• 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 buy-sell arrangements so that efficient transfers of ownership may take place when an equity holder withdraws, dies or otherwise desires to transfer an ownership interest in the business.

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

• Meet with an accountant to discuss: (1) tax return preparation 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.

• 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.

• 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 (1) implementing a system to protect trade secrets, (2) requiring employee confidential information and invention agreements, and (3) registering and maintaining patents, trademarks and copyrights.

Congratulations if you are on track with your 2024 Small Business Resolutions. For those matters on which you have not yet started, 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 to assist you with the open legal matters on your checklist.