Compliance review for corporations

High-level goals of an annual compliance review - Confirm corporate existence and good standing in each state where the corporation is formed or qualified. Maintain records proving compliance. - Confirm federal tax and employer obligations are current. - Confirm corporate governance formalities (bylaws, minutes, shareholder and director meetings) are documented. - Verify required state filings (annual/biennial reports, initial reports, amendments) and franchise tax payments. - Verify registered agent information and service. - Review industry-specific and federal regulatory obligations (employment, safety, data privacy, securities if applicable). - Update calendars, delegated responsibilities, and remediation plans.2) Immediate federal items to check - Beneficial Ownership Information (BOI) / Corporate Transparency Act: FinCEN issued an interim final rule (March 26, 2025) that removed the BOI reporting requirement for entities formed in the U.S. (domestic reporting companies) and limited the definition of reporting companies to certain foreign entities registered to do business in the U.S.; foreign reporting companies must follow the new deadlines (reporting companies registered before March 26, 2025 had to file by April 25, 2025; companies registered on/after March 26, 2025 have 30 days after registration to file).

Watch FinCEN for updates and small-business relief notices; beware of scams and third-party fee solicitations — there is no fee to file directly with FinCEN. (See FinCEN BOI page.)- IRS / Employer obligations: ensure EIN on file, that payroll withholding returns (e.g., Form 941) and federal unemployment (Form 940) are filed and paid, information returns (1099-NEC) are issued on time, and employer tax deposits are current.

Confirm ACA reporting if you meet applicable thresholds and that payroll tax deposits and filings are reconciled with payroll records.- Labor & safety: confirm compliance with DOL/EEOC posting requirements, FLSA (classification/OT), and OSHA where applicable.

High-level goals of an annual compliance review

- Update calendars, delegated responsibilities, and remediation plans.2) Immediate federal items to check - Beneficial Ownership Information (BOI) / Corporate Transparency Act: FinCEN issued an interim final rule (March 26, 2025) that removed the BOI reporting requirement for entities formed in the U.S. (domestic reporting companies) and limited the definition of reporting companies to certain foreign entities registered to do business in the U.S.; foreign reporting companies must follow the new deadlines (reporting companies registered before March 26, 2025 had to file by April 25, 2025; companies registered on/after March 26, 2025 have 30 days after registration to file).

Watch FinCEN for updates and small-business relief notices; beware of scams and third-party fee solicitations — there is no fee to file directly with FinCEN. (See FinCEN BOI page.)- IRS / Employer obligations: ensure EIN on file, that payroll withholding returns (e.g., Form 941) and federal unemployment (Form 940) are filed and paid, information returns (1099-NEC) are issued on time, and employer tax deposits are current.

Confirm ACA reporting if you meet applicable thresholds and that payroll tax deposits and filings are reconciled with payroll records.- Labor & safety: confirm compliance with DOL/EEOC posting requirements, FLSA (classification/OT), and OSHA where applicable.

• Confirm corporate existence and good standing in each state where the corporation is formed or qualified. Maintain records proving compliance.
• Confirm federal tax and employer obligations are current.
• Confirm corporate governance formalities (bylaws, minutes, shareholder and director meetings) are documented.
• Verify required state filings (annual/biennial reports, initial reports, amendments) and franchise tax payments.
• Verify registered agent information and service.
• Review industry-specific and federal regulatory obligations (employment, safety, data privacy, securities if applicable).

State-level essentials (what to verify for each state where you are formed or qualified)- Annual/biennial report (statement of information)

deadline method varies by state (anniversary vs. fixed date), and fees range widely. Filing keeps your company in good standing; failure can result in late fees, loss of good standing, and administrative dissolution. Use each state Secretary of State site to confirm deadlines and fees (example: California SOS statements; Delaware franchise/annual report rules for Delaware corporations).- Franchise tax / state corporate taxes: some states (Delaware, California, Texas, etc.) impose franchise taxes or other entity-level taxes; formulas vary (revenue-based, authorized shares, par value). Confirm calculation method and payment deadlines.- Registered agent: maintain an active registered agent in each state of formation/qualification and confirm the listed agent’s address.- Initial reports & required filings after formation: some states (e.g., CA, NV) require an initial report shortly after incorporation; check local requirements.

Corporate governance & internal documentation (critical to preserve limited liability)- Bylaws and certificate of incorporation

confirm current versions reflect ownership and governance structure. - Annual (or organizational) shareholder and board meetings: hold and document meetings; record minutes and resolutions for major actions (issuance/transfers of stock, loans, capital changes, bylaws amendments, mergers/acquisitions). - Cap table and stock issuance records: confirm issued shares match minute book and stock ledger. - Corporate minute book and corporate recordkeeping: maintain a centralized record (minutes, resolutions, bylaws, stock ledger, material contracts, licenses, tax filings).

Compliance areas often overlooked- Keeping good-standing certificates and proof of filings for due diligence. - I-9 retention and verification audits. - Workers’ classification (employee vs contractor) and 1099 compliance. - Data privacy and security

California’s CPRA/CCPA and other state laws (NY SHIELD, Virginia, Colorado, etc.) can impose requirements; inventory of personal data, privacy notices, and vendor contracts is essential. - Industry-specific federal permits or environmental regulations.

Penalties & risks- Administrative penalties, late fees, loss of good standing, administrative dissolution/revocation, and potential corporate veil piercing if formalities are not observed. For BOI, FinCEN guidance warns about scams; historically penalties/fines were possible for noncompliance before regulatory changes.

Practical step-by-step annual compliance review checklist (actionable)- Step 0

Assemble the team (owner(s), corporate secretary, accountant, counsel, registered agent). - Step 1: Confirm entity status: run Secretary of State searches for formation state and states of qualification. Obtain certificates of good standing where needed. - Step 2: File required state reports and pay franchise tax/fees. Document proof of filing. - Step 3: Confirm registered agent(s) information. Update if needed. - Step 4: Review and adopt minutes/resolutions: hold and record annual shareholder and board meetings; update minutes for material events. - Step 5: Review governance docs: bylaws, shareholder agreements, officer appointments, and the cap table. - Step 6: Tax & employment review: reconcile payroll and tax deposits/returns, issue 1099s/other returns, confirm unemployment and workers’ comp coverage, audit I-9s and poster compliance. - Step 7: Regulatory & operational compliance: confirm required permits/licenses are current, review data/privacy and security posture, and update employment policies/handbook. - Step 8: Contracts & insurance: review material contracts, insurance coverage, indemnities, and renewal dates. - Step 9: Update compliance calendar and document retention plan. - Step 10: Engage counsel/accountant for unresolved issues and prepare remediation plan.