Corporate Governance for small biz owners
Corporate Governance for your INC or LLC can be very daunting, especially if you have never done this before. We will show you how to keep your corporation or LLC compliant with your formation state’s many regulations, so that you can focus on the most important thing your business.
Don’t make the critical mistake!
Most small business owners, who operate their business through a Corporation or Limited Liability Company, make the critical mistake of only focusing on the external filing requirements of the state. These are after all the most tangible and obvious, especially when the state sends a notice of “Administrative Dissolution” for not paying a fee or submitting a report. Almost all small business owners assume that if the state doesn’t send them a notice, their entity must be fine. Maybe even the entity will show up on the state’s website as in “Good Standing” or “Active”. But, this does not mean that the entity is compliant!
What is corporate compliance?
Making sure your INC or LLC stays current with your state’s internal (corporate governance) and external (state filings) formalities will insure that the entity is “compliant” with the state. A compliant entity is one that is considered “active” with the state, and can therefore enjoy all of the tax and legal benefits the entity offers. A “non-compliant” entity can lose these benefits. In other words, if an entity is non-compliant, the owners can be held liable for the entity’s activities and lose all the tax benefits that would otherwise be available were the entity in good standing and active.
Is it even required with an LLC?
Another common misconception is that an LLC does not have to follow any of the formalities of corporate governance. We will explore this further.
In the coming weeks, we will add information to help you better understand what you have to do to keep your Corporation or LLC “compliant” with your state’s regulations.