Do you know what it means to be in good standing? Small businesses in good standing with their state of incorporation are considered to be in compliance. Staying in compliance also requires attending to ongoing maintenance. Filing annual reports on time, for example, helps ensure the business does not accidentally fall into bad standing. If this happens, it’s possible the business may be involuntarily dissolved by its state of formation.
Luckily, compliance maintenance is fairly easy to fulfill for small businesses. Make sure to cross off the following as you take care of the following small business matters.
- Get necessary business licenses.
- File an annual report.
- Obtain a certificate of good standing.
- Register for a doing business as name (DBA).
Get necessary business licenses.
Many businesses require certain business licenses to operate within a specific industry, city, county, and state. The types of licenses required by businesses vary depending on what the business does and its location.
Without the proper business licenses, you may not be able to legally operate your business. Reach out to your local Secretary of State to determine which licenses, and possibly permits, your business needs to file for in order to stay in compliance.
File an annual report.
If you have incorporated your business as a limited liability company (LLC) or corporation, you must file an annual report. This document acts as an annual record of the activities going on in your business.
An annual report also keeps the Secretary of State aware of changes to your business. If there have been any significant changes, such as moving to a new street address for your physical storefront or changes in registered agent, you must file an annual report that reflects these changes. This helps keep the state up to date about your company and allow your business to meet ongoing state regulations.
Register for a DBA.
Some businesses prefer to conduct business under a doing business as name (DBA). If you find this is also true of your business, you’ll need to file a DBA application.
Aside from allowing your business to accept payments under an alternate name, you may also open a business bank account with a DBA.
Obtain a certificate of good standing.
Does your business plan to conduct business and complete transactions in a state outside of its state of incorporation? If so, you will need to file for a certificate of good standing.
A certificate of good standing acts as evidence that your business is not only in existence but also in good standing with its state of incorporation. If you plan to file a foreign qualification that authorizes your business to conduct operations in a new state, it is usually required to obtain a certificate of good standing. This acts as proof of compliance and acknowledges that your business has also met its tax and filing obligations.
Business & Finance Articles on Business 2 Community