| Monthly Resolutions
Company resolutions are acts that the members/directors of a company resolve to ratify. Examples of resolutions are purchasing real estate, hiring an attorney or applying for a business line of credit. The reason why resolutions are important and why they should be documented is that they are vital towards substantiating the validity of your company’s actions. You may file your company annually, pay your dues and take measures to record your annual meetings but when it comes down to the nitty-gritty, even these steps to secure your company’s compliance may not be enough in the face of persistent IRS agents or litigious attorneys. The reason for this is that resolutions are the meat and potatoes of your annual minutes and they validate what you have resolved to do in the fiscal year and without them you leave kinks, or as know in the legal vernacular, exceptions, which are weak points that make your company exempt to it’s limited liability. There are an alarming amount of businesses that already fail to meet required compliance so you can imagine how many more fail to do document their resolutions. Like I said in a previous entry, people do not want to see the negative, especially in business where they are conditioned to think positively and about success and abundance. Resolutions can also been seen in that manner as well rather than something to fuss over to avoid something they don’t want to think about. One of the factors loan officers consider when granting a loan is if a company is being run properly and is compliant. Believe it or not, resolutions could help someone qualify for a larger loan or better interest rate because they show that the company is being taken seriously. Turn the tables and one can see how investors or those seeking a joint venture would be more willing to put money up front for your company if risk is minimized through proper documentation. When tax season comes along, imagine how pleased your accountant will be with all the tax deductions he or she will find in your resolutions that you possibly overlooked. Furthermore, all businesses need and exit strategy. Eventually you will either sell your business or someone will inherit it. Resolutions can actually add perceived value to potential buyers and how exciting would it be for your heirs to know that your legacy is worth all the blood and sweat you put into it. |
|
|
Friday, August 07, 2009
|
|
| Company Compliance
Previously we mentioned that many businesses must file annual reports with their respective states. In addition to this, businesses that fail to do this will eventually be dissolved due to non-compliance. Specifically, corporations must do this by law and recent amendments in the state of Arizona require partnerships to fill out this report as well and pay its associated fees in order to maintain their business. This has ramifications on all businesses because it is only a matter of time until all entity types, LLCs included, must report annually and pay their dues. In fact, some states are already requiring this so no matter where you are, it is important to be up to speed as to your state requirements. We also discussed annual minutes and much of the information contained within your annual report are represented in your annual minutes, which stems from what is discussed and documented at your annual meeting. Sounds confusing, possibly, but when you analyze the components of these requirements it is simply about maintaining a logical and consistent approach to running your business on a regular basis. Since various states are tightening the screws on legal compliance, it is becoming ever more important to maintain a legitimate and healthy business practice. Annual meetings can be reduced to monthly activities known as company actions or simply put, resolutions. Next time I’ll address the importance of resolutions and not only how they can increase profitability of your company but how they can help keep your company from being dissolved, even when you are reporting annually. |
|
|
Thursday, July 23, 2009
|
|
| Why an LLC?
I once read that the chances of getting sued on any given day in your business is greater than your chances of going to the hospital. That’s why I find it alarming that so many people are engaging in business with the general public as a sole proprietor. Unfortunately a lot of people don’t see themselves getting sued and for good reason. Who wants to think about the worst; people try to see the positive. Why do you think Vegas makes so much sans current economic factors? Because people see that remote, small window of hope and latch on to it regardless if the chips are stacked against them, no pun intended. This is why I say forming a Limited Liability Company should be the next major step because not only does it separate your business from your personal assets in the event of a lawsuit or audit, forming an LLC can be seen as an investment in your business that yields a much better chance of earning you more money than rolling dice at the craps table. Forming an LLC establishes credibility amongst your competitors, earns you very similar tax benefits to what corporations are allowed and your CPA, which you should have if you don’t, can pinpoint more deductions for you. So why gamble, forming an LLC is the fastest way to protect yourself while generating a return on investment greater than you might expect and for a very nominal cost. |
|
|
Monday, July 13, 2009
|
|
The Importance of Secure Online Storage of your vital Business Documents
 What happens if you experience a theft, endure a natural disaster, or just simply lose your printed business documents such as Articles of Incorporation, Operating Agreement, or historical Monthly Resolutions? If they were generated by you or for you and only exist in paper format, you could be left in an extremely vulnerable position in the event of an audit, a lawsuit, or if you are seeking credit. One of the most often overlooked features that any company should demand when selecting a business document service partner is whether or not they store your historical information offsite from your physical business on a secure, online server that can be accessed using your personal login and password. This way you can retrieve those documents at any time, for any reason and you are never left in a position where your personal assets are in jeopardy because your documentation is missing. |
|
|
Thursday, May 28, 2009
|
|
