Regulatory Compliance and Governance
Regulatory Compliance
In addition to ensuring that an entity is properly organized under the law, it is equally important to maintain an entity’s compliance with applicable law. As such, it is important to keep track of the entity’s filings, such as annual reports, tax payments and IRS filings to ensure that the company maintains good standing and to ward off potential problems, such as forfeiture and loss of limited liability status. Our Woburn business lawyers are here to provide you with the information you need to make an informed decision.
In addition to being in full compliance with state tax law and federal IRS requirements, an entity must also be in full compliance with applicable securities laws. In some instances, the unwary could inadvertently violate state and/or federal securities laws during financing rounds beyond the initial funding. It is crucial that securities laws are considered whenever seeking financing or selling a business.
Our Woburn business formation lawyers will make sure that your entity is fully compliant with all regulatory requirements at any stage of your company’s development.
It also is important to determine if a business requires any special permits or is subject to zoning laws. Many municipalities limit where businesses may operate or, in some zones, severely limit their time and magnitude of operation. Since many entrepreneurs these days are starting home businesses, it would be prudent to determine that the business can actually be run out of a home address.
Governance
Corporate governance is the system by which companies are directed and controlled. Boards of directors are responsible for the governance of their companies. The owner’s role in governance is to appoint the directors and the auditors and to satisfy themselves that an appropriate governance structure is in place. Responsibilities of the board include setting the company’s strategic goals, providing the leadership to put them into effect, supervising the management of the business, and reporting to the owners/stockholders on their stewardship. The board’s actions are subject to laws, regulations and the wishes of the owners/stockholders in the general meeting.
Governance issues are not specific to corporations, as limited liability companies, partnerships and limited liability partnerships can be subject to operating principles, which could be statutory or outlined in the entity’s governing documents. Even if a limited liability entity has a single owner, certain formalities and rules of governance must be observed to preserve the significant liability shield afforded its owner(s) and maintain its benefits as an operating entity. If they are not observed, a lawyer could easily “pierce the corporate veil” and subject the owner(s) to the obligations of the company.
Regardless of your type of entity, we make sure that your entity not only complies with all applicable regulatory requirements upon formation, but also continues to be in compliance as it operates, by providing such ongoing services as preparing materials for board meetings, taking minutes, reviewing transactions for regulatory compliance, and ensuring that all transactions are properly approved by the entity. Contact our Woburn entity formation lawyers today at (781) 674-2562 to learn more!
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