A new year brings a lot of great possibilities for businesses. Take the opportunity now to start your year off the right way by organizing your important business documents and addressing licensing requirements.
Below are our top recommendations for ways you can ensure you’re ready for the year.
Update Your Corporate Records & Minutes
Throughout the year miscellaneous votes could have been held, meetings held, and important minutes taken. All of these should be stored in the corporate book for easy reference later. The beginning of the year is also great time to amend any bylaws or operating agreements along with your official articles of organization, if need be!
Renew Any Professional Licenses
If your business requires any professional licenses or certifications be sure to renew those! Not only do most contracts that you might have with your clients or your suppliers require you to comply with any and all applicable laws, but your state’s corporations division might fine you for failure to comply as well. Getting into the habit of routinely updating these licenses every year will prevent fines and possibly even future litigation claims against your business.
Renew & Review Expiring Contracts
Most contracts can be on either a fixed or auto-renew term. Make sure that any contracts that do not automatically renew that you would like to continue have been appropriately amended to extend the agreement between the parties. Conversely, make sure that you provide the appropriate termination notice to cancel any auto-renew contracts that you no longer want. Failure to either extend or terminate a contract can mean lost profit to your business.
Review Contracts For Allowed Annual Price Increases
A lot of contracts have a built-in escalation clause. This is normally tied to the Consumer Price Index (CPI). Take advantage of the escalation clause and the ability to increase your revenues by knowing when you can request an escalation from your client. On the other side, since the CPI is currently high, consider whether to try to renegotiate any contracts where the escalation clause will cost your business money.
Update Your Contract Records
Several amendments might have been added under a contract throughout the year including any amendments to extend or take advantage of any escalation clauses. Pull your contracts and amendments out of the desk drawer and get them filed away with the appropriate agreement they might govern or amend. Keep your contracts database up to date. Having a robust contracts lifecycle management process can save time in the future should you need to reference those agreements and keep track of the affirmative actions you might need to take under them!