Managing Your Limited Liability Company
Starting a limited liability company (LLC) takes a lot of work. Before you serve your first customer or fulfill your first order, complete the initial business formation process.
Although starting a business is a significant achievement, small business owners cannot coast on past accomplishments. You must look to the future and plan next steps. This includes keeping your business in good standing with the state. Not maintaining the legal status of your LLC presents serious consequences. You could owe fines, be prevented from expanding your business, and even face involuntary dissolution.
The Consequences of Losing LLC Status
An LLC is a legal entity that exists independently of its owners. This structure protects LLC owners (called members) from the LLC’s debts and lawsuits. What’s more, it provides taxation flexibility. These do not extend to businesses considered sole proprietorships and partnerships.
Technically, once the state issues a certificate of good standing, it remains valid until the expiration date. However, if you lose good standing, the state typically will not issue a new certificate when the current one expires.
Remaining in Good LLC Standing
Being denied good standing, even for a few days or weeks, can devastate your business. If you fail to carefully maintain your LLC’s standing, you might only learn at the last minute—when you go to apply for a loan or register to conduct business in another state—of a lapse in status.
Renew Business Licenses and Permits
Maintain licenses and health permits, occupational licenses, liquor licenses, building permits, and zoning and land use permits. Renew many of these annually. In addition to state licensing laws, cities and counties may have separate registration rules.
You Earned Your Good LLC Standing. Do Not Let It Slip Away.
An entrepreneurial saying suggest that you should work on your business, not in your business. It captures the idea of taking a big-picture view instead of dwelling on minutiae. Don’t spend too much time on tasks you could delegate. Doing so robs you of the energy needed to plan, build, and strategize.
Compliance failure is not a mistake your LLC can afford to make. Maintaining good standing demands constant attention, cross-department coordination, and a proactive strategy. To stay on top of your LLC status obligations, consider meeting regularly with an experienced business attorney, especially if your LLC has a more complex structure and operates in multiple states.
About Skvarna Law Firm in Glendora and Upland, California
Let a skilled attorney assist with your estate plan. So, contact us today to learn about your options (909) 608-7671. We operate offices in Glendora and Upland, California. Therefore, we provide legal services for individuals living in San Bernardino, Los Angeles, Orange, and Riverside Counties. This includes the cities of Upland, Ontario, Rancho Cucamonga, Fontana, Colton, Rialto, Chino, Chino Hills, Glendora, Claremont, Montclair, Pomona, La Verne, San Dimas, Azusa, Covina, West Covina, Diamond Bar, Walnut, La Puente, Corona, Norco & Mira Loma. Visit SkvarnaLaw.com to learn more.
