How to Assess Your Company’s Legal Health in 2023

Checking up on your company’s legal health may help you avoid legal calamity and put yourself up for success in 2023. Here’s how to do a legal checkup.

What you’ll discover:

What exactly is a legal checkup?
What should I look for in a legal checkup?
How can I ensure that my company remains compliant?
Who should I contact for a legal checkup?

When we begin a new year, companies should evaluate, review, and refocus. Examining your company’s legal compliance may also be on the agenda. Assessing your company’s health at the start of each year and ensuring compliance with the law may be critical for both small and big organizations. It is all too easy to allow something as simple as renewing an insurance coverage fall through the cracks, putting your company in jeopardy. A periodic legal checkup, on the other hand, may assist company owners avoid legal issues in the next year. In this post, we will look at how to do a legal checkup to help you prepare for a prosperous new year.

What exactly is a legal checkup?

A legal checkup is an examination of your company’s legal papers and contracts, licenses, insurance, and other compliance-related obligations. A legal checkup is as vital as a regular checkup for your money, automobile, or house. Not paying attention to your business’s operations, like ignoring a plumbing leak or a squeak in your automobile, may be just as destructive.

While doing a legal audit for your company, you may examine your legal papers as well as your activities. Start by ensuring that everything is up to date, then fix anything that was forgotten or fell off your to-do list in the previous year. Typically, proving legal compliance or ensuring your organization is obeying the law requires the assistance of a lawyer.

What should I look for in a legal checkup?

Every company is unique. If your firm is a limited liability company (LLC), for example, you will most likely have different legal requirements than a single proprietorship, partnership, or corporation. Several concerns, though, exist regardless of how your organization is structured.

Here are some points to consider while doing a legal checkup:

When should business licenses, insurance plans, and other legally essential permissions be renewed?
When should you renew your company’s state registration, including any mandatory yearly reports?
Examine your LLC or partnership agreement.
Check your tax professional’s availability, then adjust your calendar for when to file and pay taxes.
Determine if your current company structure still supports your development and objectives. For example, suppose you are a single owner who has to create a corporation due to the expansion of your firm.
Determine which intellectual property (IP) needs to be protected. This might include new logos, branding, designs, goods, and website pages, among other things.
Examine and revise your vendor or third-party provider contracts.
Your Lease Agreement should be reviewed, updated, or renewed.
Examine and revise marketing or advertising initiatives.
Examine your personnel requirements.

You may use this time to prepare as well as examine the papers and procedures you presently have in place. Do you wish to expand into a new market? Do you intend to expand? Do you wish to introduce a new product?

Preparing your approach allows you to establish legal best practices from the outset. Planning ahead of time is usually preferable than attempting to catch up and correct mistakes afterwards.

How can I ensure that my company remains compliant?

It is prudent to maintain legal compliance while you attempt to expand your firm. It frequently takes less time and money to ensure that your company is operating lawfully ahead of time than it does to go back and address legal concerns and pay fines. After all, no one wants to be singled out by the IRS Revenue Service or the Department of Labor, nor do they want to accrue state or federal fines and penalties.

The following may assist you in ensuring that your company is lawful today and in the future:

Verify the filing requirements in your state. Check to see whether you have submitted all of the documentation necessary by your state, such as your annual report or any other required documents. If you make any changes to your firm, such as relocating office locations, you may need to update your information. Several states may provide a Certificate of Good Standing to show that your company has satisfied its continuing state filing obligations.
Pay your state and local taxes and licensing costs. Maintain compliance with your state’s taxes, such as franchise and excise taxes, as well as any business license or permit costs. You should also check with your local city and county to see if any fees are necessary. Several states do not need business licensing fees at the state level, but do require them at the municipal level.
Keep current with federal filing obligations. If you have more than 50 full-time workers, for example, you may be required to offer information regarding the Affordable Care Act. If you have workers on-site, you may be required to post workplace posters and comply with other standards.
Maintain well-organized written documents. Keeping written records of your company’s activities, processes, and policies is essential for compliance. It will be easy to demonstrate that you are obeying the law if anybody asks. Keeping written documents may also assist speed up the process and boost a buyer’s trust if you decide to sell your firm one day.
Adapt to ever-changing legislation. Legal requirements vary often, sometimes extremely frequently. Compliance includes staying on top of these continual developments.

Who should I contact for a legal checkup?

If you want to keep on top of compliance concerns as the new year begins, arrange a legal checkup with a lawyer. It may also be beneficial to check in with your supervisors or key personnel members ahead of time to obtain some information on your own.