Many companies, especially small or medium-sized businesses that don’t have the capital for risk management, can end up being non-compliant in their legal paperwork. Non-compliance can be a costly setback to your business. It’s essential to handle your business risks appropriately from the beginning to protect your finances and reputation.
Here are seven tips for staying compliant with legal paperwork:
File Annual Report
Most states require a business or corporation to file an annual report (or Statement of Information) every year. This paperwork is necessary, but it makes sure that the state has the current information a company, such as mailing addresses, etc. Deadlines and fees vary by state.
A business is supposed to file official notifications with the state any time they make a significant change, like moving to a new location. This is a straightforward form to submit, and in most states, its called “Articles of Amendment.”
Current Registered Agent
If a business is using a Registered Agent service for their official mailing address, they must keep up with the service fees. If you fall out with the Registered Agent service, your mail is returned back so that you could be missing out on an important letter from the state.
Business Name is in Order
It is a common practice for businesses to file an official name business name for their government paperwork, but use a casual variation for day to day business. If using a name that varies from the official name, a company needs to file a Doing Business As (DBA) with their state.
Separate Business and Personal Finances
Legally businesses need to keep different financial records, and there cannot be shared between a business owner’s personal accounts and the business accounts. Your business should have a separate business checking account.
Up-to-date with Franchise Taxes
In some states, franchises have a franchise tax for the ability to operate in the state. Businesses that are a franchise need to stay current with this tax to be in good standing.
Permits are Current
Along with registering a company with the government, businesses need to apply for numerous local permits and licenses to operate in the city or state they are located in legally. Some licenses and permits that might be necessary include a reseller’s license, health department permit, fire department permit, or general business permit. Businesses need to make sure they keep up to date with compliance and renewing these licenses and permits as required.
How Can a PEO Company Help with Paperwork
A PEO, a professional employer organization, is a service that you can outsource for HR-related issues, safety and risk mitigation, payroll processing, employer tax filing, health benefits, workers compensation insurance, employers liability insurance, and lawsuits. Through a practice called co-employer, the PEO company becomes the employer on the records for tax purposes. With a co-employer agreement, the employer and PEO company have shared responsibilities and liabilities of the business.
Outsourcing a PEO means your business will enter a co-employer agreement, and through this agreement, the PEO company becomes the employer on the records for proof of tax purposes. When you are in a co-employment arrangement, the PEO company has shared liabilities with your business. A PEO company employs HR-specialists who help with your business administration, and are up-to-date with the changing employment laws and regulations
A PEO company will ensure that your company is being compliant with all legal paperwork through their policies and procedures, detailed record-keeping, payroll assistance, and HR guidance. This article for Retireat21 breaks down the nation’s favorites legal services a PEO company can help your business with.