Always stay on the right side of the law when you are running a corporation. Failing to comply with the state regulations that apply to your business as a corporation may result in personal liability for business debts and even the cancellation of your incorporation set ticket. The following are some quick guidelines that you should follow in order to make sure that your corporation is always in compliance with the state laws and regulations.
- Call the secretary of state each year to check the status of your Corporation. Put the annual meetings whether it is shareholders or directors meeting on the placards. In check all documents and contracts signed by the officials of the company to ensure that proper name along with the name of the company has been used. Never sign an official document with just the person named.
- Never use your own name on an official document followed by DBA, standing for doing business as. If any older contracts have this, we appreciate those contracts.
- Before undertaking any procedure out of the normal course of business like purchasing major assets, write a corporate resolution permitting it and keep all completed forms in the corporate book.
- Never use corporate business accounts and checks for personal payments and personal debts and vice versa. Get professional advice about continued retained earnings not needed for immediate operating expenses.
When making a choice between the kind of business set up you want, you should understand that the business losses cannot be deducted on your personal tax return in the case of a corporation. Business structures such as partnerships and sole proprietorships as well as S corporations allows you to make those deductions.