Legally Speaking: Are Your Year-End Legal Matters Finalized?

Bob Dunlevey

Bob Dunlevey is an attorney with Taft Stettinius & Hollister LLP ( He is well recognized for his counseling and defense of businesses having employment-related issues, including federal and state court litigation and OSHA proceedings, wage-hour compliance, collective bargaining, wrongful discharge defense, and regulatory compliance. He can reached at

January 1, 2013

2012 has ended, and for
most of you that means the end of your fiscal year as well. Don’t start the new
year without successfully wrapping up your 2012 business affairs. Here is a
handy checklist of some things you need to consider.

  • If not already conducted, schedule your annual corporate
    meetings for shareholders and directors. Give notice in accordance with your
    bylaws/code of regulations, and set the agenda for the meeting

  • Review your corporate minute book to make sure it is up to
    date: Are last year’s minutes in there, and are they
    signed? Did the minutes call for certain actions to be taken during the year,
    and have these items been accomplished? Do the minutes ratify corporate
    actions, such as contributions to benefit plans, borrowing, auto leasing, and
    monetary distributions?

  • Have there been any changes in the officers, directors, or
    shareholders? Do the corporate records reflect those changes? Do others need to
    be elected?

  • Are there shares of stock needing to be transferred or
    canceled? Is your share ledger in the back of the minute book up to date?

  • Is the statutory agent designated to receive important papers
    current and on file with the Secretary of State? Check the state’s website.

  • Is your corporation in good standing with the state? Check
    the state’s website.

  • Is the corporation doing business in any other states? Is it
    appropriately registered and meeting the requirements to do business in those

  • Has the annual financial report?including a balance sheet,
    statement of profit and loss and surplus, and an opinion of the financial
    position of the corporation?been prepared?

  • Do the corporate records verify payments of salaries versus
    bonuses and dividends? The Internal Revenue Service can contend that payments
    to corporate officers, employees, or shareholders are not deductible dividends;
    and that payments to officers who are not shareholders are not deductible.
    Assure the proper classification of such payments by identifying the payments
    as deductible compensation and consider identifying the justification.

  • If no, or nominal, dividends are to be paid and your
    corporation has a large amount of accumulated earnings, do the minutes include
    a statement of the reasons why the earnings are being retained?

  • Have you changed financial institutions during the year and
    not noted it within the corporate records? Are those who are authorized to sign
    checks still the appropriate names, and are the appropriate corporate
    resolutions contained within the minute book?

  • Have there been loans to officers or
    shareholders that need to be documented by minutes and promissory notes?

  • Do you have a buy/sell agreement that regulates and restricts
    the transfer of shares so you don’t end up with an unwanted “business partner?”
    Have you updated the valuation information that sets the price for which shares
    are repurchased? Has the buy/sell agreement been amended to include new

  • Are your benefit plans?such as retirement, profit sharing,
    medical reimbursement, Section 125 or 401(k) plan?appropriately documented
    within the corporate records and in full compliance with the law? Are the
    summary plan descriptions you give to employees up to date? Are you
    strategizing about the impact of the Patient Protection and Affordable Care

  • Have you consulted with your Certified Public Accountant
    regarding year-end matters and anticipated 2013 financial matters?

  • Have you evaluated the cost of your Workers’ Compensation
    Program? Have you shopped for enrolment in a workers’ compensation group that
    provides good savings (discounts) and effective third-party administration?
    Have you gone online and looked at your claims history to identify your major
    claims? Have you met with your workers’ compensation attorney to devise a plan
    to eliminate costly claims from your experience and reduce your premiums?

  • For those key employees hired in 2012, do you have employment
    agreements in place addressing such things as non-disclosure of confidential
    information and non-competition? It’s not too late.

  • Have you reviewed your general liability insurance and other
    business coverages with your agent to ensure proper, cost-effective coverage?

  • Are your licenses to do business in
    various locales current?

  • Have you reviewed the exempt and non-exempt wage-hour status
    of your employees to ensure wages and applicable overtime are being paid
    properly and records maintained appropriately?

  • Your personnel policies and practices may require
    modification due to recent National Labor Relations Board decisions applicable
    to non-union employers. Is your employee handbook up to date?

  • Remember to run the numbers on your Occupational Safety and
    Health Administration (OSHA) Form 300 logs and prepare Form 300A for posting.

Dust off those corporate records and make sure that
everything is ready for the new year.