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HOME > INCORPORATE ONLINE > Company Compliance Checklists


Company Compliance Checklists


Corporation Action Checklist

  • Obtain a Tax Identification Number, using IRS Form SS-4, available at www.irs.gov.
  • If so desired, complete an S-Corporation Election form, IRS Form 2553, to classify the corporation as an S-Corp for tax purposes.
  • Hold initial meeting of directors. After the formation of the corporation is complete, the corporation should hold an initial meeting of directors (who may or may not be named in the articles of incorporation, but will be listed on the Statement of Organization by Incorporator), also called an organizational meeting. At this meeting, the bylaws are adopted, officers are elected, and stock is issued (and noted in the stock ledger) to all shareholders.
  • Adopt bylaws after incorporating. Each corporation must adopt bylaws, which is a document that outlines how the internal affairs of the corporation will be executed. The bylaws are the second most important document behind the articles of incorporation, as it indicates how the company will be operated. As mentioned above, the bylaws should be adopted at the initial meeting of directors.
  • Conduct business on the corporation's behalf. Officers and directors should visibly be acting on behalf of, and in the best interest of the corporation. This is very important when it comes to officers or directors entering into contracts for the corporation.

    NOTE: When signing on behalf of the company, be sure to indicate that this is so, e.g. sign “your name” for XYZ Company or “your name” on behalf of XYZ Company. It’s always a good idea to include your corporate title, e.g. Vice President, after your name.
  • Hold annual meetings of directors and shareholders. One requirement of all corporations is that they hold annual meetings of both directors and shareholders. It is also important that the minutes of these meetings be kept with the corporate records. If items of business are determined by unanimous consent in lieu of holding a meeting, which is popular with many closely-held corporations, the unanimous consent documents should be kept with the corporate records.
  • Keep documentation of corporate activity. In addition to keeping minutes of all director and shareholder meetings, it is important for corporations to maintain a stock ledger that records all shares of stock issued to shareholders and the contributed amount each share represents. Also, be sure to keep contracts into which the corporation enters, including leases or major business contracts.
  • Keep documentation of corporate financial activity. Corporations should record all disbursements, payments received, invoices issued (accounts receivable), and invoices received (accounts payable), and keep those records for a period of 7 years. Corporations should also keep balance sheets and profit and loss statements for each year. Additionally, it's important to document any loans taken by the corporation, as well as the repayment terms.
  • File Annual report

Limited Liability Company Action Checklist

  • Obtain a Tax Identification Number, using IRS Form SS-4, available at www.irs.gov.
  • Hold an organizational meeting. After the formation of the LLC is complete, the members or managers should hold a formal meeting to adopt an operating agreement and issue membership interest to members.
  • Adopt an operating agreement. As with the corporate bylaws, the operating agreement for an LLC is an important document that outlines the internal governance of the LLC.
  • Keep documentation of the LLC's activity. It is typically considered beneficial to keep record of any changes in membership interest and also to keep record of all major business decisions of the LLC, such as contracts and leases.
  • Keep documentation of financial activity. LLCs should record all disbursements, payments received, invoices issued (accounts receivable), and invoices received (accounts payable), and keep those records for a period of 7 years. LLCs should also keep balance sheets and profit and loss statements for each year. Additionally, it's important to document any loans taken by the company, as well as the repayment terms.
  • Hold annual meetings of members. Holding and documenting the business conducted at annual meetings of the members or managers helps LLCs keep updated ongoing records of decisions made by the owners.
  • File Annual report

 

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