We recently discussed how spring is the perfect time to revisit and readjust your estate plan. It’s also a great time to revisit your business needs if you own and operate a business of your own.
An intentional compliance check can help you avoid legal or tax problems later in the year, whether you're a tiny part-time business or a growing company with hundreds or thousands of employees. This means making sure you’re in compliance with state, local and federal regulations as they apply to your operation.
Licensing compliance
If your business is a brick and mortar location, there’s a good likelihood you have city or county business licenses, many of which must be renewed annually and require you to pay taxes or file other reporting.
If, instead, you run your business out of your home, it may not have occurred to you that you need a local business license to operate. Many cities and counties require all businesses to possess a license, even sometimes if you’re simply working as a consultant or selling goods online.
Additionally, you may need a special permit to operate out of your home, or permission from your homeowner’s association to do so.
In tandem with licensing, your locality will look at whether your physical location is zoned for the type of business you are running. It if isn’t, you will need to apply for a variance. If your business could create parking problems or change the character of the neighborhood, you could experience problems.
Many professions, such as architects, electricians and even hairstylists must have a professional license to perform their business. Food businesses need licenses (even if home-based) from the health department, while other businesses need specialty licenses (ie: bars). Without the proper licenses, your business may face fines and even be temporarily shut down, so it’s an important matter to be understood as a business owner.
Finally, if selling products or services, your business may require obtaining a seller’s permit and remit sales tax to the state. That is something every business owner should research and understand as it applies to their state of residency and/or state of business operation. CCHA recommends contacting your city, county and state to learn more about what licensing applies to you and your business, and how you can comply if you aren’t already.
Human resources compliance
Have employees? Spring is a great time to ensure you’re in compliance with all state and federal employment laws. This is certainly true if you’ve expanded your workforce in the last year, as many employment laws apply only to employers with more than a certain number of employees.
Here are some common areas that can create problems for small businesses:
- Federal discrimination: workplace laws prohibit discrimination based on race, gender, age, religion, disability, and other factors.
- Some employees are entitled to overtime pay. Be sure to comply with the applicable state laws, properly classify employees for overtime purposes, and encourage all employees to report their work time accurately and consistently.
- If you hire freelancers or other independent contractors, re-evaluate their status and correct if necessary for the coming year. The IRS clearly treats independent contractors and employees differently, and you can be required to pay taxes and penalties if you are caught mis-classifying your workers. Accountants are great resources for advice in these matters.
Additional business considerations to make this Spring include:
- Revise or create your employee handbook. Does it include a social media policy? What about other updates you've been meaning to include? Your handbook may be treated as an enforceable contract, so you'll want it to reflect your vision for your business and treat the handbook as a foundation for how employees should behave and operate. Given the times we’re living in, you may want to add language around COVID-19 and policies around technology, confidentiality, use of company devices and working from home.
- Update and refresh your website and social media. Secure new images of your team or workplace now that the weather is warming up, and ensure your brand is being accurately portrayed online.
The Business Services Team at CCHA has what it takes to help businesses reach their goals. Contact us for help with business formation, commercial transactions, business financing, tax plans, business succession planning and more.
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