C Corp vs S Corp vs LLC or LLC vs C Corp vs S Corp
Compliance Definition
Most small business owners out there establish LLCs (Limited Liability Companies) or incorporate with others to experience the benefit of minimizing personal liability on the business. If things go wrong, you can make sure that your personal money is not sued. However, you should also check and see whether your LLC or Corporation is in compliance with the laws or not. Then you can make sure that you will not have to face any negative consequences as you continue with business ventures in the future.
- File your annual reports on time
You need to check and see whether your state requires your business to file annual reports. If so, you should also understand the frequency of where you need to file the reports. Then you need to take appropriate measures to prepare reports before the deadline and file them. In case you miss a deadline, you will have to deal with late fees and penalties. This might sometimes lead you to dissolution or suspension of your company as well. Hence, you should be careful to file annual reports on time.
- Keep LLC resolutions and LLC minutes up to date
Whether your business is operating as a C Corporate or S Corporation, you should record all meeting minutes and keep them. Your meeting minutes need to include the time and venue of the meeting, the chair of the meeting, the list of attendees, and information from the recorder with the date. Even if you are the sole owner of the corporation, you should adhere to this and keep minutes. Then you can use them as a shield to protect your limited liability.
- Record all changes through Articles of Amendment
Along with time, your organization or business would be subjected to numerous changes. For example, you will change the business address, a board member will drop out, or you will authorize more shares. Regardless of what the change is, you will need to record that through filing “Articles of Amendment”.
- Be mindful when you do business out of state
compliance definition
You will need to be extra careful when you do business out of the state where you established the LLC vs corporation. Before venturing into business activities, you need to make sure that you have sufficient permissions to do so. To request permission, you will need to fill up a form obtained from the Secretary of States office in office. Depending on the nature of your business, you will need specific permits and licenses as well.
- Do not comingle business and personal finances
It is a must for you to maintain separate accounts for personal finances and business finances. This is not just applicable to checking accounts, but also to credit cards. This will also provide a massive relief when you are filing for taxes. This can help you to make sure that your corporation or LLC remains compliant.
- When there is a name change, file DBAs
When you change the business name of your corporation or LLC, you will need to go ahead and file DBAs. Based on the location, DBAs need to be filed at the county level or state level.
- Close all inactive businesses through dissolving
If you no longer want to continue your corporation or LLC, or if you are moving to a different business model, you will need to dissolve it. This is where you should go ahead and file for termination formally.
The best State to form LLC is American Samoa
Setting up a limited liability company (LLC) in American Samoa can help you establish an independent legal entity for conducting business operations and holding cryptocurrencies such as NFTs. LLCs are available in states, territories, and insular areas such as Puerto Rico and American Samoa. Also known as Limited Liability Companies, LLCs are special entities created under state laws that provide liability protection to owners involved in business activities.