Legally Speaking: Attend to Year-End Legal Matters

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

December 1, 2009

2009 is coming to an end, and for most of you that means the end of your fiscal year as well. Don’t let the holiday season frenzies cause you to neglect year-end business affairs. Here is a handy checklist of some things you need to consider.

  • Schedule your annual corporate meetings for shareholders and directors; give notice in accordance with your bylaws/code of regulations; 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?
  • Has there been a change 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 your state’s Secretary of State? (Check your state’s website.)
  • Is your corporation in good standing with your state? (Check your state’s website.)
  • Is the corporation doing business in any other state? Is it appropriately registered and meeting the requirements to do business in those states?
  • Is 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 being prepared?
  • Do the corporate records verify payments of salaries versus bonuses and dividends? The IRS can contend that payments to corporate officers or employees or shareholders are not deductible dividends and that payments to its officers who are not shareholders are not deductible, so you should ensure 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 authorized to sign checks still the appropriate names, and are the appropriate corporate resolutions contained in the minute book?
  • 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 shareholders?
  • 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?
  • Have you consulted with your CPA regarding year-end matters, such as tax incentives for equipment purchases that you may wish to take advantage of before year-end?
  • Have you evaluated the cost of your workers’ compensation program? Have you shopped for enrollment in a workers’ comp 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’ comp attorney to devise a plan to eliminate costly claims from your experience and reduce your premiums?
  • For key employees hired this year, 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 coverage with your agent to ensure proper, cost-effective coverage?
  • Are your licenses to do business in various locales current?

Dust off those corporate records and make sure that everything is ready for 2010. If you need legal assistance in your business affairs, contact Bob Dunlevey at Dunlevey, Mahan & Furry at 937-223-6003.