Legal duties

4 Legal Duties for Your Startup to Complete Before January

The new year is always a busy time, but it is especially busy if you own a startup or small business. When January rolls around, what are some necessary housekeeping tasks and legal duties that you need to take care of?

Review your finances and plan your budget

Make a diligent effort to collect on all your open accounts and settle with all your vendors so you have a complete picture of where you are at financially. Once you do that, you are in a better position to plan your budget for 2017. In what areas did you overspend? Did you have any excess funds that you could have used more wisely? Perhaps cash flow is an issue for you.

The beginning of the year is the perfect time to take a step back and objectively analyze your budget. You can plan for growth and make notes on areas in which you need to improve.

Related: 6 Activities Your Business Needs to Insure

Issue forms to employees and contractors

The law requires that your employees and contractors receive certain documentation from you before Jan. 31. Employees will receive a W-2 form, whereas contractors will receive a 1099 form.

It is essential that you correctly classify employees and contractors, because a different set of rules apply to each type of worker. If you improperly label an employee as a contractor, you may end up owing hefty back taxes and fees. That employee could also miss out on benefits that he or she is entitled to.

Take inventory

Many businesses choose to take inventory in January because it helps them to know where they stand for the upcoming year. Inventory, not just your stock of products that you plan to sell, but also of office supplies, and the equipment you use on an everyday basis.

Knowing what you have on hand will help you improve the way you use your resources and help you work upcoming expenses into your budget for the new year. You may decide to take inventory yourself or hire an independent company to take care of it for you.

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Brush up on tax laws

Tax laws change from year to year, and frequently those changes affect businesses and startups. You may have an accountant who keeps track of such things for you, but it is also beneficial to take it upon yourself to learn about relevant changes. The IRS website is an excellent place to start learning about business taxes, the benefits that you’re required to issue to your employees and more. You can even start this research before January if you have time for it.

Everyone sets resolutions for the New Year, whether those resolutions are to lose weight, learn a new skill, or save money for a vacation. As a business owner, however, you have even more to think about when the new year begins. Be sure to take care of the above housekeeping necessities so your startup can run as smoothly as possible.

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