Year-end for 2020 is fast approaching. This means carrying out certain compliance tasks for all entities.
Many things can trigger year-end compliance actions. Perhaps you expanded your business, exited a region, modified your business, were involved in a merger or acquisition, refinanced, or grew your business globally.
Ensure that you’ve covered any outstanding corporate compliance issues by reviewing these key areas below and by downloading our handy checklist.
Many licenses must be renewed annually. Plus, certain business activities may have triggered licensing changes. During the year, did you add or close a location, participate in a merger or acquisition, or add a new product or service? If so, you may have to obtain additional licenses or cancel them. Now is the time to verify that you meet all licensing requirements.
If you’ve conducted activities outside your formation state that constitute “doing business” in those states, you may be subject to a number of foreign qualification requirements. These include registering to do business with the state's corporation filing office, appointing a Registered Agent, and maintaining a registered office in that state. Failure to foreign qualify can lead to fines, loss of access to state courts, and other penalties.
Steps must be taken to properly dissolve a business in the state of formation and withdraw from all states where it has registered. Doing so before year-end will eliminate the need to file a partial-year tax return for next year and may reduce other tax liabilities as well.
To remain in good standing, it's important to fulfill all annual report requirements. This includes filing delinquent reports for businesses that were dissolved during the year.
Don’t forget that some changes to a corporation or LLC require the formation document (e.g., Articles of Incorporation for a corporation or Articles of Organization for an LLC) to be amended. For example, if a corporation or LLC underwent a name change, you will have to file articles of amendment for the change to be legally effective. Or if your Articles of Organization say that the LLC is to be member-managed and you want to switch to manager-management you have to file an amendment. And if the corporation or LLC is qualified in foreign states, an amendment to the certificate of authority might be required as well. Make sure all required amendments were filed and that the state’s records on your company are up to date. And if not, be sure to get those amendments filed.
Your compliance responsibilities extend to business activities around the world. Make sure to perform a health check of your global entities. Keep in mind that compliance requirements vary between countries, even down to the local level.
Download our end-of-year compliance checklist to easily see what’s needed and ensure you’ve addressed all U.S. and global compliance issues. You’ll close the year on the right foot and kick off the New Year with compliance confidence.
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