Business compliance is a generic term for the manner in which a business follows the applicable rules and regulations governing its organization. No one starts a business blindly to become an employer. However, as your business grows with time, you invite more personnel with you on the journey toward success. It is exciting witnessing dreams becoming reality but, unfortunately, the admin involved in hiring people can sometimes bring that thrill to a screeching halt. Hiring employees can be a very expensive exercise. Whether you hire full-time staff or contract out your clerical and secretarial work, there are costs associated with every aspect of running an organization.
To avoid this overhead, many companies opt to establish an LLC (for example).
An LLC is a separate entity from the parent company and is considered a pass-through entity for business tax purposes. By design, the LLC is exempt from most common business obligations. For example, all capital assets are considered marital assets under the terms of the pass-through designation and asset protection protections afforded to C corporations and S corporations are not available to an LLC. Because of these differences, an LLC is a great vehicle for incorporating a start up that expects to earn revenue and eventually expand its business into a publicly held corporation.
Business Compliance as a service can be a demanding endeavor but it doesn’t have to be. By definition, business compliance involves following the various internal requirements set forth by the Internal Revenue Code and the taxing authorities in the United States and abroad. One way to save time and avoid hassle with business compliance is to hire a business compliance attorney. A qualified attorney will take the time to understand the myriad of regulations that govern organizations both domestic and abroad and will help you navigate through them.
Two of the most important business compliance requirements are the Home Office Activities and the Annual Report on Audits. The home office activities require you to prepare an internal report on a regular basis and to submit it to the state tax agency on an annual basis. The annual report on audits covers financial reports that the Internal Revenue Service requires publicly. Both of these documents are involved in the process of incorporating a business but each has its own requirement that must be met.
To comply with the Home Office Activities, you will need to make sure you are in good standing with the IRS on the latest version of the Schedule H (Generally Accepted Accounting Principles). To make sure you are compliant with the Annual Report on Audits you will need to make sure you submit a completed form to the IRS with your most recent financial statement. You must be in good standing to receive any funds that result from successful audit(s) or from the approval of the conduct of the audit. Most states require laws to make sure that their annual reports on audits and financial statements meet the minimum requirements to be filed with the state.
If you are unable to meet both of those requirements, there is an option
for you to become compliant by meeting one requirement at a time. In order to do this you will want to consult with a good business compliance attorney to help you work through your options. It may take time to get to the point where you are compliant with the IRS and the state but if you do it will certainly pay off in the long run. There are many good attorneys that can help you meet the minimum requirements for your business so that when the time comes you can make sure that your business complies with the law. In order to make sure you are compliant you should always check with the IRS and make sure that you are following all of the formal and informal requirements.
- For many small businesses the best way to become compliant is to follow a checklist that has been put together by a professional.
- For small businesses it is very easy to make sure that you are compliant because you can tailor the checklist to your needs.
- If you own a small business and are trying to be compliant with the IRS then you can hire a certified public accountant or a business compliance attorney to help you follow the steps.
Many great benefits come from being compliant with the IRS and if you hire a professional they can also help you achieve a 10-year tax lien. If you are not compliant with the IRS and the state you can be fined heavily and if you are caught doing anything beyond the scope of your business you could face prosecution. In order to stay out of trouble you have to make sure that you are following all of the formal and informal requirements. This can take some time so you have to make sure that you are working with a small business compliance attorney. An attorney can make sure that you are following every requirement so that you do not fall into any future legal problems.