5 Items to review during your Company's Legal Compliance Check Up
It’s time for a legal compliance check up! Start the New Year off right with a proactive approach. Having a risk avoidance strategy will save your company time and money in the long run. Your company’s legal audit should include examining the following 5 areas to mitigate potential risks:
Make sure your company is in compliance with state requirements.This includes reviewing the following:
Corporate Records. Make sure your corporate records are up to date. It is a good idea to keep all the records together and in an easily accessible place. For an LLC, this means reviewing your Articles of Organization and any amendments, meeting minutes, and operating agreement. For a corporation, an evaluation should be done of the Articles of Incorporation and any amendments, bylaws, meeting minutes, resolutions adopted by the board of directors, and written communications to shareholders.
File the Annual Report. The company’s annual report must be filed with the State by May 1. If you file after May 1st, late fees are $400. If you do not file the annual report by the third Friday in September, your business entity will be administratively dissolved or revoked. A business that has been administratively dissolved cannot carry on any business activities, other than winding up the company’s affairs. Administrative dissolution also removes the legal shield that protects an owner’s personal assets from business creditors. This means that the business owner(s) become personally liable for business debts and judgments incurred during this time. Filing an Annual Report is simple to do yet often overlooked by busy business owners. Here is the link to file the annual report: https://dos.myflorida.com/sunbiz/manage-business/efile/annual-report/
Contracts. The beginning of the year is a great time to review all of the company’s contracts and make sure they are up to date and valid according to the current laws.
If your company does not have contracts in place, now is a great time to implement using contracts in all of your company’s relationships. DIY contracts and templates downloaded from the internet are a bad idea.I frequently get asked to review these documents and they are always insufficient for the needs of the business I am counseling.
Whether your company has contracts with employees, independent contractors, vendors, clients, partners, or investors, it is imperative that these are frequently reviewed and enforced to ensure maximum liability protection.
Website Compliance. Make sure your website is in compliance with all pertinent State and Federal laws. A lot of people are not aware of the legal requirements for websites. The following should be examined:
Is your website ADA compliant?There has been a recent rash of lawsuits against companies whose websites are not ADA compliant.Your web designer will be able to let you know
Are your terms and conditions up to date?Are they tailored to your business?Terms and conditions are contracts that govern the use of your website between you and the user of your website. They are important if you are providing any sort of useful information on your website or selling anything on your website.
Is your privacy policy current?Laws pertaining to privacy policies are evolving and there are hefty penalties for not being in compliance.
New International, Federal and State laws have been implemented to make sure that companies are properly protecting data they receive through their website.
If your website collects any personal information, such as through a “Contact Us” form on your website, you need to have processes for handling such information as well as a privacy policy detailing those processes.
4. Brand Protection. Trademarks can be your company’s most valuable asset. Make sure that anything distinguishing your brand from your competitors is evaluated for trademark protection.
If you want to begin the trademark process, the beginning of the year is a good time to get the process started.The trademark process can take up to one year so it is a good idea to begin the process now.Names, slogans and logos are the most common trademarks that businesses file.
If you already have a registered trademark, you will need to file to keep registration action.To keep a registration alive, the registration owner must file required maintenance documents at regular intervals. Failure to file the required maintenance documents during the specified time periods will result in the cancellation of the U.S. trademark registration or invalidation of the U.S. extension of protection.
5. Employees. The beginning of the year is a great time to make sure employee related issues are reviewed.
Assess whether your company’s employee handbook is being followed.Make sure the actual practices of the company are followed and match what the employees have agreed to.
Make sure each worker’s designation of “employee” verse “independent contractor” is correct. Far too often, business owners misclassify their workers. Employers can be liable for back taxes, penalties and interest, and even be subject to jail time and personal liability for the misclassification of workers. Enforcement of correct worker classification has been on the rise and an agreement detailing the relationship between the parties could help a court make the determination if the classification is correct.
The information listed above is not a comprehensive list of all items that need to be addressed in a legal compliance checkup. There are many other areas that can lead to liability so it is a good idea to have a complete checkup done to make sure your business is starting off the New Year on the right track. It is important to contact a Florida licensed business attorney if you’d like to discuss legal compliance for your business. Wheeler Legal PLLC would love to assist your Brevard County business. Please contact us by calling (321) 209-5995 to find out how we can help you.
Disclaimer: The information contained above is provided for general informational purposes only, and does not constitute legal advice, nor is it intended to create an attorney-client relationship. This firm aims to provide quality information, but we make no claims, promises or guarantees about the accuracy, completeness, or adequacy of the information contained in or linked to this post. Nothing provided herein should be used as a substitute for the advice of competent counsel.
