Compliance & Government Regulations

Establish Good Standing and Protect your Assets

One of the more common reasons for incorporating your business is to protect your personal assets. This is accomplished when a corporation or LLC is formed, because it is considered a distinct legal entity, separate from its owners. Corporations and LLCs are required to follow certain federal and state regulations to remain compliant and be eligible to receive a certificate of 'good standing'. It is important for you to know the legal aspects of starting and running a business.

Each state has specific requirements for each type of entity, which if properly followed, will keep your company in compliance. These can vary by state and some of the more common items are detailed below:

Some Corporate Compliance Requirements Include:

  • Conduct Organizational Meeting for a Corporation - Hold initial meeting to elect officers.
  • Adopt Bylaws or an Operating Agreement - Prepare a written document that outlines how your business will operate.
  • Keep Accurate Records - Maintain financial documentation for a period of seven years.
  • Pay Annual Franchise Tax - Some states impose an annual franchise tax.
  • Pay Required Taxes - Follow the proper tax filing rules of the federal government and the state(s) where you operate and/or formed your business entity.
  • Conduct Annual Meeting for a Corporation- Hold an annual meeting of directors and shareholders including written minutes.
  • Distribute Profits Accurately - Allocate profits exactly as outlined in your bylaws or operating agreement.
  • Don't Co-Mingle Funds - Maintain a separate business bank account from your personal accounts and do not co-mingle funds between accounts.
  • Establish a Registered Agent - Maintain the name and address of your registered agent on file with the state of formation.
  • File Annual Statement - Provide updated information at regular intervals as required by the state.

CorpAmerica can assist you with defining your compliance needs. To learn more, call to speak with one of our Business Specialists today at 877-246-2462 or 302-636-5448. Or, you can email us at info@corpamerica.com.

Frequently Asked Questions

1. What is Legal Compliance?

Legal compliance can be described as following the rules of the state for starting and running a corporation or LLC. Each state has specific requirements for each type of entity, which if properly followed, will keep your company in compliance with government regulations.

2. What is 'good standing' and how can I show others I have it?

Businesses that follow the rules and regulations of the state, submit requested items, and pay taxes or fees timely, are considered in 'good standing' with the state. If you continue to be compliant with the state, you can request a 'certificate of good standing' for your company.

CorpAmerica can assist you with obtaining a certificate of good standing. Contact one of our Business Specialists today at 877-246-2462 or 302-636-5448. Or, you can email us at info@corpamerica.com.

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Did you know?

Businesses set up as an S Corporation are not taxed on their profits. Instead, profits and losses are passed through to the shareholders to be taxed on their individual returns.