Many Clients reach out for legal help after they have created a corporation and ask me what to do next ?
The following is a short list of some “next steps” that likely need to be taken (specifically in California):
- Get an EIN from the IRS. You will need this and the articles to open a bank account. You will also need to elect if you want to have “S” status and may need to file IRS form 2553.
- Have your initial board meeting with the directors who were appointed by your incorporator and adopt your bylaws, issue shares, appoint officers and pass initial resolutions regarding banking and other significant items.
- Make your initial “Statement of Information” filing with the California Secretary of State
- Make a filing with the California Department of Business Oversight regarding the issuance of your shares (your attorney should know if you need to make any SEC filings).
- Collect all your corporate documents and save them in a “minute” book. This can be virtual or a physical item, but I find many clients still prefer an “old-school” binder. This is important because you will need to refer to these documents in the future and will place new documents in the binder at least every year.
- Business License and Fictitious Business Names. If a business license is required by your city or county you will need to file for one. You will also need to file a fictitious business name if you are using one.
- Doing Business in other States. If you are doing business in other states and have a “nexus” there you will need to register with the Secretary of State in those other States.
- Income / Franchise Taxes and Estimated Tax. You will need to be pay both Federal and State income tax and likely make quarterly estimated tax payments.
- Payroll Tax and Related Requirements. You will need to make withholding for all employees on both the State and Federal level and each employee needs a W-4. You will also need to pay for Unemployment Insurance and Worker’s Compensation and strictly comply with wage and hour laws and meal and rest break requirements. Any contractors should be issued 1099’s.
- Immigration Laws. You need to check each employee’s eligibility for employment and fill out an I-9 for each employee.
- Licensing and Industry Specific Regulation – Just a sampling are the CHP, PUC, Federal DOT, Contractors State License Board, BPPE, FDA, FCC, Department of Insurance, local health departments, alcoholic beverage control, dispensary permits, occupancy permits, or professional licensing bodies and requirements. Also make sure you are prepared to handle any OSHA requirements, environmental requirements or even collective bargaining and voluntary trade or industry group requirements.
- Other Federal, local and state requirements – Minimum wage, sick time, Healthy San Francisco, background and credit investigation and hiring restrictions, ADA, FMLA and other leaves of absence.
The above list is not exhaustive, but if you can check off all these items, you should be well on your way to avoiding potential legal headaches in your future business.