ANNUAL MAINTENANCE FOR CORPORATIONS
Every year a corporation must perform certain tasks in order to be compliant with Florida state law and most importantly in order to maintain the corporate protection (corporate veil). A business attorney in Jacksonville can help you maintain your corporate compliance, but you should be also well aware of what it takes to comply with Florida law.
This is a checklist of items to go through for a Florida for-profit corporation:
What about Chapter S Corporations?
- Mark sure there are 100 or fewer shareholders (usually not an issue for closely held corporations)
- all shareholders are eligible to be shareholders of an S-corporation.
- Prepare and submit the corporation’s annual report to the Florida Department of State (“Sunbiz”) to maintain active status with the Sunbiz, whether or not any changes are necessary.
- The report must be filed by May 1 to avoid a $400 late fee. (§§ 607.0122(17), (23), 607.1622, and 607.193, Fla. Stat.)
- As of 2019, the fee is $150 filing fee (which includes a $61.25 fee for the annual report and $88.75 supplemental corporate fee).
- Easiest way to submit this report is online (Sunbiz.org).
- If you don’t file the annual report for your corporation by the third Friday of September, Sunbiz will administratively dissolve the corporation on the Sunbiz’s records at the close of business on the fourth Friday of September (§ 607.1420(1)(a), Fla. Stat.).
- If your corporation has been administratively dissolved because you did not file on time its annual report and pay the filing fee, you can still prepare and submit a reinstatement application online (§ 607.1422, Fla. Stat.)
- If you corporation is qualified to do business in other states, make sure to file statements or reports requirement by those jurisdictions and pay any applicable fees and taxes owed there.
Maintain Corporate Records Annually
- Every year you must prepare a notice and the minutes (or written consents) for the annual shareholders’ meeting (§§ 607.0701 and 607.0704 to 607.0707, Fla. Stat.). Please note there is no magic to these documents, usually it is standard language that is included, but the key is to do it every year, and have it in your corporate book.
- Every year you must prepare a notice and the minutes (or written consents) for a board of directors’ meeting, which is usually is held on the same day as the annual shareholders’ meeting (§§ 607.0820 to 607.0823, Fla. Stat.).
- “What to include in the minutes?” is the question we get every year from clients. Consider including important actions taken by the corporation, for example:
- Did the corporation enter into new contracts? If yes, approve or ratify them in the minutes. transferring or assigning personal obligations to the corporation;
- Did you elect new officers? Even if you did not, note who the officers are.
- Did you elect new directors? Even if you did not note who the directors are.
- Did you hire new employees?
- Did you get new loans?
- Did the corporation qualify to do business in another state?
- Did anything change in the management or ownership of the corporation?
- Is the business address still the same?
- Make sure the corporation has registered agent. Florida law provides that a Florida corporation must have a registered office and registered agent at all times (§ 607.0501, Fla. Stat.).
- Make sure that corporate books and records are up to date:
- books and records of accounts;
- minutes of all shareholder meetings or written consents for the past three years;
- what financial records have been delivered to all shareholders?
- Current information for each shareholder: full name, mailing address
- minutes of all board of directors meetings, including written consents;
- current information for each director: name and address;
- current information for each officer: name and address;
- articles of incorporation with all amendments;
- corporate bylaws with all amendments;
- most recent annual report
*Note that Florida state 6077.1601 requires that a corporation maintain books and records in written form or in another form capable of conversion into written form within a reasonable time.
- Consider reviewing corporate Buy-Sell Agreement or Shareholders Agreement annually.
- are all the provisions of the agreement still consistent with the goals of the shareholders?
- What needs to be updated?
- Does the formula for valuing the company still work?
- Is life insurance in place to fund the buy sell agreement? Is it enough?
- Anticipated life changes for shareholders (divorce, disability, death, retirement) are all these addressed?
- Annual report time is a great time to consider other needed policies and agreements:
- Does the corporation have a document retention policy?
- Does the corporation need a Bring Your Own Device to Work policy for employees?
- Does the corporation need a social media policy for employees?
- Does the corporation need an email policy for employees?
- What about the employee handbook?
- What else to consider?
- Renew any licenses, permits and certification.
- Renew any existing fictitious names (if necessary).
- Review any contracts to see if they need to be renegotiated with vendors?
- Review insurance policies (for example, commercial general liability, workers compensation, malpractice, errors and omissions, property and casualty, and directors and officers’ liability) to make sure that they are still sufficient for the corporation’s needs.
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