The Entity Upkeep Guide
Congrats on your new LLC or Corporation!
This guide covers your next steps to upkeep and maintain your new business entity.
1. Avoid Scams
You will get scams in the mail asking you to pay money for things you do not need. These are designed to look like they are official government notices, and may ask you to pay for labor law posters or other filing services. They will generally say in the fine print that they are not associated with the government. You can disregard these or check with me.
2. Filings, Licenses & Permits
Statement of Information - If your LLC or corporation was formed in California, you will need to file a statement of information with the secretary of state every year or two. These are due every year for corporations and every two years for LLCs. We are happy to help.
Business License - Most cities require that your business has a business license for tax purposes. If you setup your business entity with me, we likely connected on setting up your business license with the city. Otherwise, check with the city where you are operating from on local requirements.
Sellers Permit - If you are selling physical products, you may need a sellers permit with the state. Check with your accountant if you need one and get that filed with them.
DBA - If you are doing business as any name different that your LLC or corporation name, then you might need a DBA with the county. I can help with this as needed.
Other Licenses & Permits - If you are selling regulated products or services like food, supplements, alcohol or cannabis, or professional services, then additional licensing compliance may be necessary.
3. Finances
Bank Account - You can use your articles, EIN, and founder agreements to open a bank account for your new entity. Even if you already have a business bank account as a sole proprietor, you need to switch that into the name of your new entity to help limit your personal liability for the business.
Taxes - Connect with an accountant to stay on top of city, state, and federal taxes. Your first tax filing may be due within the next few months, so make tax plans for your new entity with your accountant as soon as possible.
Tax Elections - You can also ask your accountant if they recommend that you make an S-Corp or C-Corp election for your business to change how it is taxed. This can save you a lot of money if they recommend it.
4. Use Your Entity
Put the world on notice that you are doing business as an LLC or corporation, otherwise you might end up personally liable for business debts or damages. This means identifying your LLC in:
Contracts - In all of your business contracts, make sure that your entity is clearly identified as the party to the contract, like “Your Business LLC, a California limited liability company”, or “Your Business Inc., a California corporation”. If you just put your brand name without “LLC” or “Inc.” or other corporate identifier, that’s not enough and you may end up personally liable on the contract
Marketing Materials - Add the full name of your entity to your website footer, terms of use, privacy policy, product packaging, and e-mail signature line so it is clear to all of your customers and clients that your offerings are coming from your entity, not you as an individual.
5. Governance
Finally, keep up with your entity governance and document any changes to the company. For example:
Meeting Minutes - If you are a corporation, you need to have an annual shareholders meeting and keep meeting minutes. This can be as simple as you alone documenting on a form that you are re-electing yourself as director. This is not filed anywhere, it just keeps a paper trail of your corporate formalities to help protect your limited liability.
Changes - If you add partners to the business, take-on investors, give equity to your workers, or go through other changes to your entity, you should clearly document those with your counsel.
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