As the year draws to a close, business owners should focus on three crucial areas to ensure a smooth transition into the new year: taxes, corporate formalities, and future planning.
**The Power of Documentation:** For limited liability companies (LLCs), comprehensive documentation is paramount. Maintaining meticulous records, such as a tax diary, shifts the burden of proof to the IRS, requiring them to disprove the validity of your claims. This proactive approach strengthens your position in case of an audit.
**Annual Meetings: Blend Business with Pleasure:** Conducting your annual meeting before the year’s end is essential. Consider combining business with leisure to make the process more enjoyable. Meetings can be held anywhere within the continental United States. Holding them abroad, or in Alaska or Hawaii, is permissible if you can justify the location’s relevance to your business operations.
**Streamlining Corporate Minutes and Meetings:**
1. **Notice or Waiver of Notice:** For corporations, written notification via certified mail to all shareholders regarding the meeting is required. However, if you are the sole shareholder, a waiver of notice is sufficient. Forms for both are readily available.
2. **Meeting Minutes:** Document all discussions and decisions made during the meeting. If you’re a sole proprietor, jot down your thoughts and plans for the upcoming year. The location is flexible; you can even hold your annual meeting while skiing in Aspen, brainstorming marketing strategies between runs.
3. **Resolutions for Significant Actions:** Formalize significant decisions made during the annual meeting with resolutions. While resolutions aren’t needed for routine activities like client dinners or attending seminars, they are crucial for actions such as renting new office space, opening a new bank account, or purchasing a vehicle. When in doubt, create a resolution.
4. **Medical Reimbursement and Educational Assistance Plans:** Establish written medical reimbursement and educational assistance plans. These documents, easily accessible, demonstrate compliance and can provide significant benefits to yourself and your employees.