Edmunds Legal, PC
January 11, 2024
Set your Business up for Success in 2024: By Haley Kopp
As the new year begins, it’s a great time to check in and ensure your business is set up for another successful year. Below are a few items to think about for the upcoming year.
Corporate Governance
As a corporation, you should set up an annual meeting with your stockholders. The main purpose of this meeting is to elect the directors of the corporation. Annual meetings of stockholders are required by state law.
In addition to an annual stockholders’ meeting, it is a best practice to hold quarterly meetings of the board of directors. The board can discuss a variety of topics at these meetings, but typical areas of discussion include approvals of major company actions, strategies for the future of the business, granting equity to service providers, and company performance over the prior quarter.
Limited liability companies have less stringent corporate governance requirements than corporations, but should ensure that major decisions are made in compliance with the terms of the Company’s Operating Agreement, which may include meetings of the LLC members or board of managers, as well as approvals of company actions by written consent.
Contract Compliance
January is a great time to review your current vendor and client contracts. Here are a few things to keep in mind during your contract review:
- Have you fulfilled your obligations under the contract? Has the other party fulfilled their obligations? Is the contract working in the manner in which it was originally intended to work? If not, is it worth revising the contract or renegotiating?
- Do company contract templates reflect up-to-date legal and/or regulatory requirements?
- Are client contracts consistent from client to client? If not, are the differences noted in a location that is accessible to all persons who are tasked with contract compliance so that the company can easily comply with the differences?
- Does the company have a comprehensive contract maintenance policy in place to monitor use and compliance with contracts?
Company Filings
Every company has certain state and federal filings they need to take care of, many times on an annual basis. Take some time this month to ensure that you have completed all required filings for your company. Some examples of company filings include (but is not limited to):
FinCEN’s Beneficial Owners Report: It is very likely that your company will have to report identifying information about itself and all of its Beneficial Owners to the U.S. Department of Treasury’s Financial Crimes Enforcement Network. There is an initial report that is required to be filed in 2024, but updates to the filing will need to be made within 30 days of any changes related to the reported information.
Delaware Annual report: Delaware requires each company formed under Delaware law or doing business in Delaware to file an annual report that provides details about the company and its directors/officers.
California Statement of Information: California requires each company formed under California law or registered as a foreign company in California to file an annual Statement of Information (or a biannual Statement of Information for specific entities) that provides details about the company and its directors/officers.
Strategic Planning
The beginning of the year is a good time to take a look at the company’s budget and budget allocations. In reviewing the budget, the company should set milestones and review goals with employees, contractors, partners and vendors. This can give insight to upcoming capital requirements and allow the company to strategically plan future financings or capital raises to ensure access to capital when needed.
For more information or assistance relating to any of the topics above, please contact Catherine Edmunds at catherine@edmundslegal.com.
This communication is provided as a service to our clients and friends and is for informational purposes only. It is not intended to create an attorney-client relationship or constitute an advertisement, a solicitation, or professional advice as to any particular situation.