Blog Details

As the new year approaches, it’s the perfect time for business owners to pause, reflect, and prepare. Running a business is an ongoing journey filled with successes, challenges, and lessons learned, and the transition to a new calendar year provides a natural opportunity to evaluate where you’ve been and where you’re headed.

A well-organized legal checklist is your roadmap to a successful new year. Think of it as a tool to ensure that no stone is left unturned when it comes to the legal and administrative aspects of running your business. It can include tasks like reviewing key agreements, assessing compliance with tax and regulatory obligations, and evaluating your financial and insurance policies. By breaking the process into manageable steps, you can address potential vulnerabilities while reinforcing your business’s strengths.

Review and Update Business Structure

The beginning of a new year is the perfect opportunity to evaluate your business structure and ensure it still aligns with your goals. Whether you operate as an LLC, corporation, or partnership, your structure impacts everything from liability exposure to tax obligations.

Evaluate Your Current Structure

As your business evolves, so do your needs. A structure that worked well when you first started may no longer be the best fit. For example:

• Growth: If your business has expanded significantly, you may need a structure that accommodates increased complexity, such as converting from an LLC to an S corporation for tax advantages.
• Liability Exposure: Changes in your industry or operations might call for restructuring to better protect personal assets or limit liability.

Take the time to discuss with your legal and financial advisors whether your current structure supports your long-term goals.

Update Business Records

Once you’ve reviewed your structure, ensure your business records are accurate and up to date:

• Operating Agreements or other governing documents: Amend these documents if there have been changes in roles, responsibilities, or ownership shares.
• State Filings: File any required amendments, annual reports, or compliance documents with your state to maintain good standing. While Ohio doesn’t require annual filings, many states do, and your entity will be cancelled if you fail to do so.

This review process not only helps your business stay compliant but also ensures you’re ready to address future opportunities or challenges with a solid legal foundation.

Audit Contracts and Agreements

Contracts are the backbone of any business, governing relationships with vendors, clients, employees, and property owners. A thorough audit ensures your agreements are compliant, relevant, and aligned with your goals.

Review Key Contracts

Start with contracts that are critical to your operations:

• Vendor and Supplier Agreements: Confirm that terms and conditions still meet your business needs. Look for clauses that might require renegotiation, such as pricing, delivery schedules, or exclusivity terms.
• Client Contracts: Check for expiration dates and ensure the terms reflect current pricing and scope of services. Address any areas that need clarification or updates.

Employee Agreements

Employee-related contracts are essential for protecting your business:

• Employment Contracts: Ensure they reflect current roles, salaries, and benefits.
• Non-Compete and Confidentiality Agreements: Verify these agreements comply with current legal standards and adequately protect your trade secrets and proprietary information.

It’s also a good time to review employee handbooks or policies to ensure they are aligned with evolving labor laws.

Lease and Real Estate Contracts

If your business operates in a commercial space, lease agreements should be carefully examined:

• Renewals: Identify upcoming expiration dates and start negotiations early to avoid unexpected changes.
• Terms and Conditions: Ensure clauses regarding rent adjustments, maintenance responsibilities, and termination rights align with your current operations and financial situation.

By regularly auditing your contracts, you not only avoid potential disputes but also position your business to respond effectively to changing circumstances.

Examine Compliance Obligations

Staying on top of compliance obligations is crucial for avoiding penalties and ensuring smooth operations as you transition into the new year. From tax filings to industry-specific regulations, every detail matters.

Tax Compliance

A new year means new tax responsibilities, and preparing ahead can save you both time and stress:

• Tax Filings: Confirm that your federal, state, and local tax filings are current, including payroll taxes and any industry-specific taxes. Ensure estimated payments for the previous year are accounted for and accurate.
• Employee vs. Independent Contractor Classification: Properly classify your workforce to avoid penalties. Misclassification can lead to costly fines and legal challenges, so double-check the status of every worker.
• Year-End Preparations: Gather necessary financial documents and work with your accountant to prepare for filing season. Taking this step early ensures compliance with deadlines and minimizes surprises.

Regulatory Compliance

Laws and regulations often change from year to year, and it’s important to confirm your business meets all requirements:

• Industry-Specific Regulations: Ensure you’re compliant with any updates to the rules governing your sector, such as safety standards, environmental regulations, or financial disclosures.
• Licenses and Permits: Verify that all necessary licenses and permits are renewed for the upcoming year. Missing deadlines or operating without proper documentation can lead to fines or shutdowns.
• CTA Compliance: The Corporate Transparency Act may require your business to file Beneficial Ownership Information. It’s possible that this law will be overturned as unconstitutional and currently there is an injunction against its enforcement, but keep an eye out for changes!

Conducting a compliance check now helps protect your business from unnecessary risks and ensures you’re positioned for a successful year.

Financial and Insurance Review

A comprehensive review of your financial health and insurance coverage provides clarity and security as you plan for the year ahead.

Audit Financials

Your financial statements are the foundation of sound decision-making:

• Profit/Loss Statements: Analyze these to identify areas of strength and weakness in your revenue and expenses.
• Cash Flow: Evaluate whether your cash flow is steady and sufficient to support operations, especially during slower periods.
• Budgeting: Use insights from your financial audit to create a realistic and actionable budget for the next fiscal year. Allocate resources for growth opportunities while setting aside reserves for unexpected expenses.

Insurance Policies

Business risks evolve, and your insurance coverage should adapt to reflect these changes:

• Evaluate Existing Policies: Review coverage for general liability, property damage, workers' compensation, and other essential areas. Ensure that limits and terms are sufficient for your current operations.
• Cyber Liability Coverage: With cyber threats on the rise, confirm that your policy includes protection against data breaches, hacking, or other cyber incidents.
• Update as Needed: If your business has expanded, introduced new products, or undergone other significant changes, update your policies to reflect these developments.

Regularly assessing your insurance ensures you’re adequately protected and reduces potential risks.

Review Intellectual Property

Protecting your intellectual property (IP) is vital to maintaining your competitive edge and ensuring the integrity of your brand. A new year is an ideal time to audit your IP assets and safeguard them against misuse.

Protect Trademarks, Patents, and Copyrights

Your trademarks, patents, and copyrights represent significant investments in creativity and innovation:

• Audit IP Assets: Review your portfolio to confirm that all trademarks, patents, and copyrights are active and properly registered. This includes logos, slogans, product designs, and proprietary content.
• File for New Protections: If your business has launched new products, services, or branding over the past year, ensure these are adequately protected by filing for new trademarks, patents, or copyrights. Acting early prevents others from capitalizing on your hard work.

Monitor Unauthorized Use

Infringement of intellectual property can undermine your brand and profits:

• Investigate Infringements: Use tools like trademark monitoring services or legal counsel to identify potential unauthorized use of your IP.
• Take Action: If you discover infringements, work with a legal professional to issue cease-and-desist letters or pursue litigation if necessary. Protecting your intellectual property is critical to preserving your business's value.

Contact Keller, Barrett & Higgins

As the new year approaches, preparing your business with a comprehensive legal checklist is an investment in success. By reviewing your business structure, auditing contracts, ensuring compliance, and planning for growth, you can position your company for a productive and stress-free year ahead. Proactively addressing these areas minimizes risks, avoids costly pitfalls, and ensures your operations are aligned with your long-term goals.

However, tackling these tasks alone can be overwhelming. That’s where Keller, Barrett & Higgins can help. Our team of experienced attorneys is here to provide personalized guidance, helping you navigate the complexities of business law and empowering you to focus on what you do best—growing your business.

Let us help you ensure your business is legally prepared for the new year. Reach out today to schedule a consultation:

• Phone: (513) 351-6058
• Email: info@kbhlawyers.com
• Website: www.kbhlawyers.com
• Address: 6900 Miami Avenue, Madeira, Ohio 45243

Don’t wait until issues arise—get ahead of the curve with a solid legal foundation. Contact Keller, Barrett & Higgins today to start the new year with confidence and peace of mind.