How to Prepare Your Business for 2024
By far and away, my #1 piece of advice in legally preparing for a new year?
If you want things done right, they can't be rushed
Of course, it's hard to plan ahead if you don't know in advance what your business will require, right?
Therefore, I hope this post will help to clarify & demystify the time clock a bit, so you can plan ahead prudently for the year to come.
One thing to note: (aside from IRS rules), there are few legal requirements with a specific date or day of the year attached; instead, most of your legal deadlines will be based upon your legal needs. I’ll explain more below:
Assess your business’ annual requirements + 1 new requirement in 2024
For example, if you have an LLC, you’re required to file articles of renewal each year. In Oklahoma, this document must be filed on the anniversary of your LLC filing, with a $25 filing fee. This information will be found on your state’s Secretary of State website- make sure you take a look, and plug that date into your calendar now.
Estimated time to complete: 15 minutes
Due date: put a recurring reminder in your calendar for 11 months from your filing date- this will give you plenty of time to prepare for your annual filing.
On January 1, 2024, a new reporting requirement goes into effect that will require small businesses to file a Beneficial Ownership Information (BOI) Report with the U.S. Dept. of
Treasury’s Financial Crimes Enforcement Network (FinCEN).
The Corporate Transparency Act (CTA), enacted by Congress, sets forth a new reporting requirement, with FinCEN providing the specifics on who needs to report, the reporting deadlines, and the details required in the reports. It's crucial for every small business owner to be aware of this mandate, as failing to comply could lead to significant penalties.
We’ve created an eBook that aims to clarify some of the primary questions small business owners might have regarding BOI reporting. Because this mandate will affect nearly every small business owner, it’s critical to ensure if you know whether you must comply, and then how to comply (or who should take these actions for you).
Look at your contracts
One of the most important steps you can take for your business is ensuring that it has a strong contract in place- protecting both you and your clients. The concept of determining when exactly you should seek out a new contract is a tricky one, but you must take these factors into consideration:
You must have a contract prior to beginning any work with clients
If you need a custom-drafted contract, recognize that it will take your attorney a fair amount of time to draft it for you, especially during busy seasons. Start early - conservatively speaking, start the process three months before you want the contract.
In general, if you’re looking for a custom contract, allocate at least 3 months (from the date you contact your lawyer, until the date the final document is in your hands) to get into your attorney’s calendar. This is a generous estimation, but that’s for the very reason I mentioned earlier: you never want to leave your legal work to the last minute, being rushed to be completed.
Trademarks
Estimated timeline: The entire process, from the commencement of the due diligence search, until you have the paperwork in your hands used to take anywhere from 6 to 12 months but in the post-covid world, we are seeing it take 12-18+ months. Learn more about the Trademark process.
Between the 5th and 6th year following your registration, you‘ll need to file a Declaration of Use to maintain an active registration Action step: first, think backward. Figure out when you would need the trademark- if it’s a year from now, you need to start the process by contacting an attorney. Once you have the trademark, put the date of registration on your calendar, and make a calendar reminder 4 years after that date. This will be early, of course, but allows you time to find a good lawyer (and if they’re good, they’re probably busy, and will need time to get you on their calendar).
Formation Changes (Restructurings, adding or splitting from a partner, etc)
There’s also a time-based reason for you to consider this with the start of the new year. For example, if you want to elect for your LLC to be taxed as an S corp, you must file your election either within 75 days of forming your LLC or at the start of the new year. Therefore, it’s critical to examine this consideration at the end of the year.
Do you have a corporation? Take a look at your corporate resolutions and meeting minutes to see what requirements there are for your corporation.
Simply put, these types of transactions should be contemplated and begun 12 months or more from the date when you actually need to finalize the transaction. What might require structuring? Electing a new tax form, spinning off from or bringing in new partners, etc.
Insurance
Much like tax matters, I do not give any advice on insurance requirements. However, the end of the year is the best time for you to examine what insurance your business needs, and reach out to a local financial advisor who can point you in the right direction. Full disclosure: my husband is a financial advisor and an advisor in his office focuses solely on insurance requirements for small business advisors. Working with him has been such a game changer for my small business- not only has it saved me a ton of time and money, but I know that I am working with a professional rather than just hoping that what I google is accurate. I can’t put a dollar amount on my peace of mind.
Before I get started, there is one thing I tell each and every client/potential client: in order to have a sound business, you need to have three people on your team: a good accountant, lawyer, and financial advisor. In my opinion, if someone has to be licensed by the state in order to provide their services, or carries a fiduciary duty with their clients, there is no sound reason why I would rely on my own “research” (read: Google) to try to figure it out on my own.
Get your taxes/financials in order
I will be the first to tell you that I don’t practice tax law or give tax advice. However, you need to make it a priority to have your finances in order for your bookkeeper/accountant at the end of the year. Not only will having reconciled books give you a fresh start to the new year but examining them now will allow you to make key investments and purchases that might be necessary for deductions, etc. Most importantly: get your 1099’s in order. List out any subcontractors you’ve paid more than $600 for 2022. They should fill out a W-9 now so that you aren’t both racing the clock during tax season to get this done. This isn’t something you can skimp on either- the IRS will levy a $30-$100 fine for each form you neglect to send or send late. If they find you intentionally did not fill out this form, you could be facing a minimum penalty of $250 per form.
Website
The simplest step is left for the end, make sure to update the copyright symbol in your footer with the current year; I want you to just have that little copyright symbol, ©, with the year and the name of your company. For example, ©2024, Creative Law Shop, LLC, or © 2019-2024, Creative Law Shop, LLC.
The copyright designation is essentially just putting a flag in the ground, and saying to anyone using your website, “I own the information on this site and any claim to it, this is mine, and I don’t want you to use it impermissibly.” While it’s a simple change you can make, it’s an effective one.
And never forget to update your privacy policy or terms and conditions with the most recent date that updates are made, each and every time you make updates!
