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2023 Year-End Checklist for Businesses

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Amanda J. Dernovshek and Lindsey M. Mead
Foster Swift Business & Tax Law News
November 17, 2023

2024 Goal Plan ChecklistThis checklist has since been updated from its original publication.

1. Meeting with your tax advisors:

There may be last minute planning possibilities this year. Consult with your tax advisors while you still have time to act in 2023. You don’t want to be scrambling on December 31. By not assuming your accountant or financial advisors will automatically suggest ways to minimize your tax liability, you can be proactive and simultaneously maximize your prospective opportunities by meeting with your tax advisors.

2. Preparing for the Corporate Transparency Act:

Beginning January 1, 2024, newly created companies (and many previously existing companies) that fall under the umbrella of the Corporate Transparency Act (“CTA”) will be required to report information about their “beneficial owners” with designated reporting periods. As of right now, existing companies will have one year to comply. Companies formed on or after January 1, 2024 will have to report within 90 days of formation.

While these intentions are good, the impact of the CTA is expected to be drastic and jarring. The number of legal entities already in existence in the United States that may now need to report information on itself, its beneficial owners, and its formation or registration agents is in the tens of millions with potential penalties for not reporting.

If you don’t know if your business falls under the CTA, visit our Corporate Transparency Act Resource Page for more information (Corporate Transparency Act Resource Page | Articles and Videos: Foster Swift) or contact a member of our CTA Team.

3. Annual meeting and annual meeting minutes:

It is important to document your activities and the decisions made at your annual meeting within your meeting minutes. Additionally, if your company is a corporation formed under Michigan law, an annual meeting is required. If you are instead a limited liability company, an annual meeting is still a good idea.

4. Distributions from your business:

If you need to make a distribution from your business, this is the time to evaluate. Consult your tax advisors now.

5. Yearly gifts and charitable donations:

If you would like to donate to a charitable organization and have a deduction for the 2023 tax year, you have until December 31 to make the gift.

6. Annual reports:

Look at the states in which you are incorporated and make sure you are aware of due dates for the filing of annual reports in the coming year.

7. Articles of amendment or Internal Revenue Service (“IRS”) documents:

Examine the previous year and determine if there have been any changes that would require the filing of articles of amendment or updates with the IRS.

8. Permits and licenses:

Analyze your permits and licenses. Assess whether any of your permits or licenses require renewal in the coming year, or whether any information needs to be updated. Creating a calendar of deadlines for annual reports or updates is a helpful way to plan for the next year and makes sure you are meeting compliance or regulatory deadlines.

9. Monitoring and protecting intellectual property:

In today’s digital world, a company’s intellectual property can be a competitive advantage. Review proactive and protective measures your company has in place to secure its intellectual property rights (copyrights, trademarks, service marks, patents, and trade secrets).

Another trend we are seeing on the rise is “copyright trolling.” This is the practice of using algorithms by certain plaintiff firms to search the internet for possible copyright violations of businesses using images or music that are owned by their clients and then proceed to threaten possible legal action on their behalf.

The easiest way to avoid this scenario is to make sure that your business is not using images or music pulled straight from Google or other online search platforms for external marketing or promotional purposes unless you have explicit permission from the owner to do so.

Conduct a thorough review of your website and social media accounts. When in doubt, if you don’t know if you are using copyrighted images or music, delete them and pull similar ones that are from commercially licensed stock databases such as Adobe Stock or SoundStripe.

10. Updating your privacy policy:

Your business’ privacy policy should reflect how your organization currently manages its data. However, the legal privacy landscape is changing constantly. Make sure that your privacy policy reflects current law. If you make any changes to your privacy policy, notify your users or customers immediately.

11. Incident response plan:

Data breaches and other cybersecurity incidents are becoming more frequent every year. Having an incident response plan in place is essential. It is not a matter of if an incident will occur – only when. A good incident response plan can help identify a threat quickly and help to mitigate damage. We also recommend contacting your insurance broker to review your cyber policy and confirm that it meets the needs you have.