10 Essential Steps for Corporations and LLCs to Start the Year Strong

The beginning of a new year is the perfect time for corporations and LLCs to reset, refocus, and prepare for success in the new year and years to come. Whether you’re a seasoned business owner or managing a growing company, taking certain steps now can help you stay compliant, organized, and ready to seize new opportunities. Below are 10 essential actions every corporation or LLC should take at the start of the year.

1. Review and Update Your Business Plan:

Your business plan should not be a static document. It should evolve with your company and the changes and challenges that it faces. Start the year by revisiting your goals, strategies, and financial projections. Ask yourself: Are your objectives still relevant? Do you need to adjust based on market trends or last year’s performance? Do your projections still hold up? Is your desired client or customer mix still reflective of your company and where it is going? Updating your plan ensures your team is aligned and focused on achievable targets.

2. Conduct a Financial Health Check

Analyze your financial statements from the previous year. At a minimum review your profit and loss statement, your balance sheet, and your statement of cash flows. You should also evaluate your cost of goods and your pricing to make sure you are making your intended profit margin. Identify areas for improvement and set realistic budgets for the new year. Also consider consulting with your accountant to optimize tax strategies and forecast growth.

3. File Annual Reports and Renew Licenses

Many states require corporations and LLCs to file annual reports and renew business licenses. Missing deadlines can lead to penalties or even dissolution. Make sure and check your state filing requirements, any industry specific permits or license requirements, and any local business licenses or permits. Make sure you have any deadlines on your calendar to insure you remain in compliance.

4. Review Tax Obligations

Tax season is around the corner, so prepare early. Review your financials to make sure you have identified any deductions or credits for the past year. Prepare and send any 1099s or similar documents by the applicable deadline. Begin gathering your information and insure you accountant has it in a timely manner. Failure to timely file tax returns and make payments can result in penalties and possible liens on your business or personal property. Waiting until the last minute may result in missed deductions or credits or submitting inaccurate information. Your accountant can help you with these items and deadlines.

5. Update Corporate Records

Ensure your corporate records are accurate and up to date. Do you need to prepare any meeting minutes? Are shareholder or member agreements needed or do existing ones need to be amended? Have you admitted new members or shareholders? If so, were the admissions properly handled and all required  documents signed? Proper documentation helps protect your limited liability status and demonstrates good governance. Your attorney can help you review these issues and direct you on any compliance issues.

6. Reassess Insurance Coverage

Your business evolves, and so do your risks. The start of a new year is a perfect time to evaluate your insurance needs. Make sure to review your general liability insurance, any professional liability insurance needs, your workers compensation needs, and the need for cybersecurity coverage. Make any adjustments to reflect new assets, employees or operational changes. Consult with your insurance agent to make sure you have the correct coverage in place and discuss any additions or changes to coverage.

7. Evaluate Compliance and Legal Requirements

If your company is covered by compliance or legal requirements for your industry make sure you are in compliance and have made any changes or adjustments necessary. Regulations can change frequently. Staying ahead of compliance reduces legal risks and builds trust with clients.

8. Refresh Marketing and Branding Strategies

The new year is a great time to review and revamp your marketing. If necessary, update your website and social media profiles. Do you have additions or deletions to make? Do they reflect your current business plan and marketing efforts? Now is also a good time to insure that only the appropriate employees or managers have access to change or modify your information. If an employee or manager has left the company or is no longer involved in these areas, they do not need access to your accounts. Make sure your access is updated. This is also a good time to review and evaluate the performance of your website and social media. If changes are needed, now is the time to make them.

9. Set Employee and Team Goals

Meet with your team and develop clear and measurable goals. You will want to develop performance objectives for employees and the company. You should also discuss and develop professional development plans for employees. You might also want to design and implement incentives for productivity and development.

10. Plan for Growth and Innovation

The beginning of a new year is a great time to start exploring new markets or products for your company. You should also consider whether you should invest in new technology. It is a good time to evaluate trends in your industry and evaluate whether they are something you should implement. Don't be afraid to think and dream big.

Final Thoughts

Starting the year with a structured approach sets the tone for success. These 10 steps will help corporations and LLCs stay compliant, financially healthy, and strategically focused. Make this checklist part of your annual routine, and you’ll be ready to tackle challenges and seize opportunities in the year ahead.

The information contained in this article should be considered general in nature and does not constitute legal advice. If you wish to obtain further information on the topic discussed, you should seek legal or other advice specific to your situation. Steven C. Sasser and Sasser Law Firm, LLC are licensed to practice in Alabama and this article should not be seen as an attempt to solicit legal services from outside of Alabama. No representation is made that the quality of legal services performed are greater than the legal services performed by other lawyers.