[ ] LAW The Lawyer ’ s Year End Business Checklist
REVIEW ALL DOCUMENTS CAREFULLY TO AVOID COSTLY MISTAKES
BY ALEX CHAZEN
KHUNKORNSTUDIO / SHUTTERSTOCK . COM
In the past , I have provided a checklist of items that every small business should undertake as the calendar turns from one year to the next . As my clients often ask the same year-end questions every year , I am writing this month ’ s article as a guide for the many of you who own or operate businesses with certain tasks that should be revisited every single year ( if not more often ).
1 . Review your client contracts I try to remind my clients every six months to let me review the contracts that they are using on a regular basis . Typically , form contracts get added to , rather than wholly reshaped , which can cause a real headache if a lawsuit or dispute ever arises . The law changes every year ( particularly in the extremely litigious state we call home ), and your contracts should be reviewed to ensure compliance with those changes , as well as to make sure that you are as protected as you possibly can be .
2 . Review vendor / third party contracts and leases I recently had a client that bought a new piece of commercial property . With the property came the leases of the various units on the property . One of those leases contained a very draconian ( from the perspective of the owner ) provision regarding the automatic renewal of the lease , at very favorable terms to the tenant , for a fiveyear period , but in order to terminate , notice had to be given not earlier than 6 months before the end of lease , and not less than 3 months before the end of the lease . This means that my client had a three-month window in which to avoid a five-year lease extension at rent rates well below market value . We were able to get the lease terminated in the window , But the story has a lesson – at least once a year ( and if you haven ’ t yet , now is your chance ), make sure the contracts that you enter into for longer periods of time – vendor agreements , leases , etc . – are reviewed . You don ’ t want to miss renewal deadlines , cancellation deadlines , or opt-outs for contracts that could end up costing you in the long run . A few minutes of work up front will save hours ( and costly attorney ’ s fees ) if a dispute arises .
3 . Employee Handbook Updates Now that we ’ ve talked about your contracts with clients and vendors , also take a look at your contract with your employees . Employment law is constantly evolving , and the recent midterm elections even changed some of the rules for employees depending on where your business operates . Changes as small as a shift in the dress code or return to work guidelines should all make it into your employee handbook , and you should be constantly verifying that you have signatures acknowledging your current handbook from all active employees .
4 . Make sure that your corporate documents are up to date Did you bring on a new partner this year ? Did an old partner leave the company ? Was there a change in management ? Sometimes , these types of events happen and companies celebrate ( or plan around ) them , but forget to assess the legal implications . If the ownership or management of your company changed , you want your annual board meeting minutes to reflect that change , and to make sure the documents that you are filing with the Secretary of State ( for whichever state you are incorporated in ) are up to date as well . Similar to the bullet points above , small amounts of work on the front end can save lots of time and money on the back end .
5 . Talk to your tax professional Every good attorney will tell you that they are not an accountant ( unless they really went overboard in school ). The one question I always ask of my clients at the end of a big deal , or the signing of a new contract , is if they ’ ve called their accountant . Now is the time – with the filing extensions in the rearview mirror , where your accountant likely has the time to discuss major issues with you outside of tax season . Once the calendar turns to 2023 , you will be unable to backdate payments or filings that may have been necessary in 2022 .
I hope that your holiday season is stress free and wish you nothing but success in the new year .
Alex Chazen is a Partner at Lorber , Greenfield & Polito who practices mainly construction and real estate law . He can be reached at achazen @ lorberlaw . com .
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