A New Year's resolution to keep: managing your business risks


la crosse business attorney
A New Year is not just a good time to make personal resolutions like exercising more frequently and eating better. It’s also an opportunity to assess your business’ health, beginning with how it’s organized.
 
“If you have a sole proprietorship and your business is growing, consider if that type of business entity is still a good fit,” said attorney Greg Bonney. “You may need the protection afforded by a different entity, such as a limited liability company (LLC) or a corporation, for example.”
 
With an LLC or corporation, there are other responsibilities like meetings of the owners and annual reports with the state. If you have a corporation or LLC, you should also look into whether you need to register to do business in other states. Whether you must register to do business in another state depends on the requirements of each state.


“Generally, simply owning property in another state does not mean you must register,” Bonney added. “But if you have an agent with an office in another state, you would need to register as a foreign entity.” You generally must also register in another state if you want to use the courts of that state to collect amounts due or enforce a contract in that state.

Your New Year’s business checklist also should consider the review of:
 
  • Your one-year and five-year business plans.
  • Your budget, along with an analysis of accounts receivable and cash flow.
  • Your line of credit, accounts and loans at banks, including whether changes are needed with authorized signers and personal guarantees.
  • Real estate and equipment leases, contracts or other agreements with vendors and suppliers and Whether important information is up-to-date, including permits, tax identification numbers, insurance certificates and other required information from subcontractors.

“A new year is also a great time to take a look at your employee manual and at job descriptions, along with policies regarding company equipment and computer use,” Bonney said. “Also, review insurance coverage. Some insurance companies will perform a safety audit which could reduce premium costs if you take suggested steps to reduce risks. Reducing your risks means a healthier company.”

For more information on business risk management in Wisconsin, contact us at 608-784-5678.

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