As the New Year is here, many of us spend time creating a list of personal resolutions that often times look like the same list we prepared last year! New diets, gym memberships often top the list. As a business owner it’s a good time to create a list of resolutions that apply to your business. Hopefully this is not a list that looks the same as last year’s! Some items that could be on your list are:
- Hold the Annual Shareholders and Board of Directors Meetings. A simple act which often gets overlooked in the world of closely held businesses is the annual shareholders and/or Board of Directors meetings. If required under your bylaws or applicable state law, it’s an important component of making and following the corporate form. Electing directors, having stockholder lists updated and appointing officers are good practices and in most cases, required. These items are especially important if you are looking at selling your business at some time in the near future.
- Update your Shareholder’s Agreement. For those closely held companies that have annual price valuation provisions, when was the last time you actually obtained a value? Perhaps it is good time to get a valuation done.
- Update your Will. Many people had their Wills prepared when their children were born, which may be a long time ago. Time moves quickly and circumstances do change. Does your Will leave your business to your children? Is that what you want? Do you have some children that work in the business and some that do not? Does your Will reflect how you want your business to be divided? Updating your Will to reflect your current circumstances is a great resolution.
- Update/Create a Business Succession Plan. Along the same lines of updating your Will, what plan have you put in place to operate the business after you pass or what plan do you have to retire? Is there a sale in the foreseeable future? Are there some estate planning techniques you want to put in place before a sale? Do you want to transfer an interest in the business to a family member or trusted employee? Planning now for the future is the best way to proceed.