As we enter the new year, I want to wish each of our readers a Happy and Healthy New Year. With the new year comes great opportunity for success and also the need to make sure legal issues are in order. It is a time to protect your personal and business assets, plan for the unexpected, and put into effect a tax plan for the next year, which will be of benefit this year and for years to come.
Each business operator should review the structure of their business, and make sure it is of a nature that provides protection for the owners and shareholders. In particular, a “veil” needs to be established through the use of a corporation or some other legal entity (such as a limited liability company), which separates the legal operation of a business from the individual. If a business is operating as a corporation, or some other form of legal entity, it is time to make sure all legal documents are in order. Specifically, update all minutes, check to confirm that the records are correct as to officers and directors and the purchase of major assets, and finally, confirm that all filings have been completed with the appropriate governmental authorities.
A business operator should have an attorney review the operating contracts and also, if necessary, make sure an employee handbook exists to avoid potential liability in the future. Except for emergency legislation, most changes to the laws in California took place as of January 1st and you should consult an attorney to see if any of them directly affect your business operations.
As you enter the new year, you should also make sure you have planned for the unexpected. By this, I mean that each and every reader should have a will or trust to protect their family in the event of death. If you have a child under the age of 18, I believe that you have an obligation to your child to make sure a will has been done to establish who will be the guardian in the event of the death of both parents. In addition, you should make sure your insurance coverage is sufficient to protect your business and assets (liability insurance) and make sure you have the correct coverage. As for your family, you may need to have in place life insurance or disability insurance as appropriate.
Finally, with the beginning of a new year, you should make plans for tax savings now, not later in the year. By putting into place a plan for tax reduction now, you will avoid losing some of the benefits that are afforded by a full year’s worth of planning.
Remember to set up an appointment with an attorney to meet and discuss the areas set forth above. As I have stated before, make sure the attorney is qualified to provide assistance in the areas set forth above and that your first half hour meeting to get to know the attorney is provided at no cost.