Opening a university is a great achievement. After all the hard work to obtain your state authorization, you'll want to ensure that you keep it. How? By staying compliant with Federal, State, and licensing agencies.
That being said, it can take a lot of work to keep up with all the regulations and requirements associated with running a university. For one thing, each state has its own regulations and processes for authorization, making it essential to stay informed about any changes.
But with the right strategy and preparation, you can ensure your institution remains compliant and keep your license intact. Let's explore the key areas you should consider to keep your license after obtaining state authorization.
Federal Filing Requirements
When you open a university, it is important to ensure that all federal filing requirements are met, including the payment of federal taxes and staying compliant with the Affordable Care Act (for institutions with 50 or more employees).
To continue to operate legally, your university must comply with the following regulations:
These regulations do not typically require filing, but they are important to follow nonetheless.
State Filing Requirements
Many states require LLCs, corporations, and other registered business entities to file annual reports annually.
Depending on the state, some offices may ask for biennial or decennial reports instead of annual reports. It's important to stay on top of all the filing requirements in order to keep your university license valid.
Key Things to Know About Annual Reports
- All states, except Ohio, require annual reports to be filed.
- Filing requirements and deadlines vary from state to state.
- Some states require new businesses to file an initial report.
- If you don't file on time, you may be hit with fines or other penalties
- In a worst-case scenario, your business may lose its good standing with the state, which could mean losing personal liability protection and other benefits associated with being a registered entity.
- State requirements may change because of economic factors (like the current pandemic, for example).
The filing requirements for your business every year will depend on the kind of company you own and where it is registered. But generally, here are the requirements you should be aware of:
- Annual report or biennial statement. Depending on the state, businesses may be required to submit either one of these documents. Furthermore, some states have specific due dates based on when your business was established while others maintain a single due date for all organizations.
- Franchise tax. You may need to pay a franchise tax if you’re running a corporation or LLC within the state’s borders. How much you need to pay will vary from state to state.
- Initial reports. In some states, businesses will be required to submit initial reports and pay associated fees after being incorporated.
- Articles of Amendment. Have you made any changes to your business? In some states, you might be required to amend the articles of incorporation and then file them with the state.
Obtaining Licenses, Applying for Permits, and Renewing Certifications
Licenses, permits, and recertification can be an intimidating concept for universities and colleges to consider. But in addition to all the usual business filings, colleges and universities must also take extra steps to keep their license valid.
How this works varies from one state to another. In California, for example, all private post-secondary education institutions must submit the following reports to the Bureau for Private Post-Secondary Education (BPPE) in order to stay compliant:
- Annual report: Every year, you must submit a comprehensive report with the names and details of all your graduates from each program offered.
- Your institution catalog.
- Your CPA-audited financial statements.
- School Performance Fact Sheet for each program and satellite campus.
- A quarterly report about the Student Tuition Recovery Funds you collected from each student and deposited in the Bureau’s bank account.
Internal requirements are essential for any university, college, or other organization to stay compliant with the law. That includes:
- Documenting your compliance with internal requirements and keeping up-to-date company records
- For corporations: Initial & annual director and shareholder meetings, keeping meeting minutes, adopting & maintaining bylaws and issuing stock to shareholders
- For LLCs: An updated operating agreement, issuing membership shares, documenting all membership interest transfers and holding annual meetings
No matter what type of business structure you're running, it's important to document important decisions — this ensures both internal compliance and legal compliance with the state.
Opening a college or university can be daunting, but it's critical to stay compliant with both internal and external requirements. By following the guidelines outlined here, you'll have all of the tools necessary to open a college while staying within legal boundaries. If you need help navigating these complex regulations, our team of experts is here for you.
Are you ready to open the university or college of your dreams? Call me or drop me an email to book your free consultation.