Three year-end to-dos for businesses to succeed in the new year

This time of year is the perfect time for businesses of all sizes to review several areas of the business that are often overlooked during the fiscal year-end period that, if done, can set the business up for a good year. new. There are 3 areas to focus on:

1. Review all corporate documents: Most business owners, especially small businesses, tend to create their initial corporate documents at the time of their business creation, file them away, and never review the documents again until something happens. At this point, it is often too late to make the necessary changes. Instead, business owners should review their corporate documents annually to determine if recent growth or downsizing or other business events have changed the business in such a way that updates to governing business documents, such as operating agreements for LLC or the bylaws for incorporated entities need to be reviewed.

In addition to reviewing all operating documents, it is important to review all meeting minutes of company members or directors to ensure that the proper meetings have been held as required by the company’s corporate documents. For example, most corporate documents require meetings of members or directors at least once a year at an annual meeting. Too often, partnerships and limited liability companies run their businesses for years without a single corporate charter reflecting voting on major business moves or at least the annual annual meeting to elect officers etc.

2. Review important contracts: Every business has at least one type of contract that is vital to the business. Most have several. These contracts can be employment agreements, non-compete agreements, customer agreements, subcontractor agreements, or simply invoices for goods or services performed. No matter what type of contract a particular company is based on, at least once a year these important contracts should be reviewed by a knowledgeable lawyer. Laws change often. For example, in Georgia about a year ago the legislature passed a statute that now provides guidance for writing an enforceable non-compete agreement.

If a standard contract used by a business hasn’t been reviewed by a lawyer at all or not in years, now is the time to do it. Some examples of what may be missing are

1) clear payment terms;
2) provision of attorney’s fees if an attorney collects a breach of agreement that will actually cause you to pay full attorney’s fees instead of a smaller fixed amount;
3) correct interest penalties for late payments that comply with state law;
4) Favorable venue selection and choice of law provision, so that lawsuits have to be brought under the law of your state and close to your business.

3. Review all insurance policies or obtain insurance coverage: Sure. Sure. Sure. It is vital that every business have at least one CGL policy (commercial general liability policy). Owning a business means that you will face at least one lawsuit during the life of your business, if not many, many more. Having the right insurance and plenty of coverage is vital. For example, if you have a fleet of vehicles as part of your business, make sure you have fleet insurance that covers all company vehicles, including UM coverage to protect your employees if they are injured in a company vehicle. Make sure you have workers’ compensation insurance.

Finally, if you have agreements that require your business to be named as an additional insured on someone else’s insurance policy, check that this has been done correctly. This often comes up in commercial leases. The renter must add the owner as an additional insured on the renters policy. Cases often occur where the landlord never double checked to make sure the renter added them to the policy until a lawsuit is filed against the renter and landlord.

Year-end planning is the perfect time to look at these three areas of your business and contact an attorney for advice to set your business up for success in the new year.