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Tips for keeping businesses in good standing

| Dec 20, 2013 | Business Formation & Planning |

When North Carolina entrepreneurs are establishing a business, there are many different considerations that can come up in a short period of time. Because of all of the tasks that are necessary for getting a business off the ground, one might overlook some of the legalities that are necessary for a startup company. However, these rules to which the company must adhere in order to begin a business and remain in compliance with local regulations are important, and inadvertently failing to acknowledge some of them might lead to legal trouble down the road.

In order to reach the goal of being a successful business owner, it’s important to avoid six common mistakes, according to a recent piece on the subject. Failure to file paperwork or Articles of Amendment if changes were made to the corporation or LLC with the state is one error that might happen. States have specific deadlines, which can be learned from the state’s secretary of state, for filing these materials on time in order to remain in good standing. Combining one’s personal and business finances is another error that can be avoided by keeping separate checking accounts and credit cards for each.

Failure to keep up with a registered agent or address can also result in bad standing since the agent representing the company might stop doing so if the business owner neglects to pay registered agent fees. Other errors that can have legal repercussions are failing to sign contracts with the registered business name, forgetting to obtain a DBA for name variations and not securing permission to operate in another state.

All of the above can cause a business to not only lose good standing in the state in which they are located, but they can also cause problems with the day-to-day operations of the business. Business formation can be very complex given the various licensing and regulatory compliance issues that are involved. A business lawyer may help startups to ensure regulatory compliance and help review and draft contracts.

Source: Reuters, “Are You Putting Your Company’s Good Standing At Risk?”, December 12, 2013

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