You've spent all the time and effort to get your state license, now you can relax and let the whole thing run by itself, right? Not so fast. Losing your license is a real possibility if you don't take the necessary steps to protect it. If you're a fan of the Karate Kid, you'll remember Mr. Miyagi telling Daniel - "Just remember, license never replaces eye, ear, and brain." Mr. Miyagi was of course talking about a driver's license when he was giving Daniel his first car, but the importance of paying attention to everything around you cannot be overstated.
While getting your state license can be a long and exhausting process, if you don't put in the work to maintain its validity, you're going to be starting from scratch.
Here are some of the key areas you need to pay attention to so that you don't put your license at risk.
Number One - Federal Requirements
Here's where you need to think about taxes. It is crucial to always stay on top of them, including income and employer taxes. The absolute last thing you want is for the IRS to get involved and start raising red flags.
Also from a federal perspective, you need to take the Affordable Care Act into account. If your business has 50 or more employees, you must submit health coverage information to the IRS annually.
Number Two - State Requirements
Requirements vary from state to state, so it's important that you stay on top of what's required of you. For example, almost all states require LLCs, Corporations and other registered businesses to file reports annually, but there are exceptions that you need to keep an eye out for. While requirements do vary, there are some commonalities between states. For instance, Annual or biannual statements are the norm for most states. Understand the requirements in your state and don’t miss the filing deadline. And Any significant change should be reported with an Article of Amendment. Businesses that fail to comply with these requirements can be hit with penalties or fines.
Number Three - Permits and Recertification
Universities and colleges have a long list of required filings that are needed either quarterly or annually in addition to the normal state filings. For example, in California, the Bureau for Private Post Secondary Education looks for the following:
An Annual report template must be completed every year, and should include the names and details of each graduate from each program offered at your institution.
Audited financials, Must be completed by an outside accounting firm and submitted yearly.
The School Catalog should be updated and submitted to the bureau every time there are changes made to programs, policies, or procedures at your institution.
And the School Performance Fact Sheet which must be submitted yearly and should include data on job placement rates, course completion rates, and other statistics.
Number Four - Internal Requirements
While the state and federal requirements are necessary, your own internal record-keeping is also important. A corporation has specific records and documents that it must keep and maintain on an ongoing basis. In addition, corporations are required to hold shareholder meetings and keep the minutes of those meetings on file. Minutes are the official record of what happened at the meeting and can be used to resolve disputes or provide evidence in legal proceedings.
While the requirements for LLCs and other business types aren't as strict, it's still a good idea to keep detailed records for your business. This will help you stay organized and compliant.
As you can see, while the requirements aren't burdensome, they are necessary if you want to maintain your business license. By following these simple steps, you can ensure that you don't lose your license and that your business remains in good standing.
To learn more about this topic, explore our university licensing series in the links below. And be sure to check out our next video 'What Should I Know As A Foreigner Opening A University In The U.S?’ As always, feel free to give me a call or Contact Us with any questions you may have. I’ve been helping clients establish universities in the US for over a decade, and I’m looking forward to helping you, too.