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End-of-the-Year Business Legal Checklist (For start-ups and well established businesses)

Posted by Giselle Ayala Mateus | Dec 14, 2020 | 0 Comments

2020 was tough, we all know. However, the end of this year is getting closer, and making a good checklist will definitely impact how we start in 2021. Many businesses may feel that there are a lot of topics they could include in their End-of-the-Year Business Legal Checklist. This note will help them to narrow those topics or to come up with additionals!

Business Licenses

To properly conduct their activities businesses must apply for licenses. This is the way local and state authorities assure compliance with the law. As a result of the crisis created by the coronavirus (COVID19) pandemic, many businesses changed their operations, closed and opened new locations, reduced their workforce, added new services, or changed ownership. Many of these activities may have triggered licensing changes. To start with the right foot 2021 now is the time to verify that your business meets all licensing requirements. For this purpose, New York City offers businesses free information regarding each available business license.

Foreign Qualification

Considering that the U.S. is still dealing with the spread of the coronavirus and that states have already put in place travel restrictions; it is possible that companies formed outside of New York be required to file for a foreign qualification to have their employees perform services while they are physical in New York. To know whether it is required to file for authority, one must determine if the company at issue is doing business in New York.

The definition of what constitutes “doing business” in New York, cannot be found in any book. New York Business Corporations Law Section 13-1301, states that a corporation is NOT doing business within the State if it conducts one or more of the following activities in New York:

  • Holds meetings of its shareholders and directors.
  • Maintains bank accounts.
  • Maintains an office only for the transfer, exchange, and registration of its securities.
  • Appoints and maintains trustees or depositories with relation to its securities.
  • Maintains or defends any action or proceeding, whether judicial, administrative, arbitrative, or otherwise, or settles claims or disputes.

This section still misses the point, what is that mean to do business in New York? Well, dealing with this question, courts have usually made emphasis on certain factors to analyze whether a business is in fact doing business in New York.

  • Whether the activities are directly related to the commercial or fundamental activities of the foreign legal entity.
  • Whether the activities at issue have a local or intrastate character.
  • Whether the activities are regular, permanent, continuous, and systematic.
  • Whether the activities are vital and essential to the organization's business (not merely incidental).
  • Whether the activities are performed by one or more employees of the foreign entity.

Annual Reports

Business compliance involves also filing annual or biennial reports. Under New York Law Domestic and foreign business corporations and limited liability companies are required to file a Biennial Statement every two years with the New York Department of State. The Biennial Statement must set forth:

  • The name and business address of its chief executive officer.
  • The street address of its principal executive office.
  • The address to which the New York Secretary of State shall forward copies of process accepted on behalf of the business.
  • The number of directors constituting the board, if a corporation, and how many directors of such board are women.

If a business fails to file its annual report, it will lose the opportunity of updating important information, such as the business address for service of process, which is used to provide important notices, for instance, related to ongoing litigation. Additionally, if a business is in the process of completing a transaction, such a negative record, could be problematic.

Payroll, W-2, and Employees

As the year ends, many businesses want to reconcile their numbers, comply with the obligation in regard to payroll, and organize all required documentation to provide W-2s as is required by law. Before the end of the years, it is a best practice to put things in order and prepare to start the new year ready.

Here it is important to remember that each year, employers must send Copy A of Forms W-2 (Wage and Tax Statement) to Social Security to report the wages and taxes of their employees for the previous calendar year. Additionally, a Form W-2 must be given to each employee. Form W-2 tells employees how much they earned from their employer in the past year and how much withholding tax they have already paid on those earnings.


Even though there is no general date to enforce or review agreements, ending or starting the year, it is a good business practice to go over those major agreements in which a legal entity is involved, to plan for future performance, prepare to request any pending services, pay outstanding balances, among others. Additionally, the effect of the crisis created by the coronavirus pandemic maybe still preventing the business from operating as it does ordinarily, this situation may require a closer look at those agreements still in place to renegotiate.  

Advertising, Intellectual Property and E-commerce 

The coronavirus crisis took everyone to the internet, to meet family and friends, take online or streamed courses, conduct business, shop, donate to good causes, watch movies, and more. However, the crisis also led to a rise in fraudulent activity, including false advertising and the sale of counterfeit products. Considering this, businesses should take the end of the year as an opportunity to take a closer look at their presence online, what current and potential consumers are saying about them, and what current and potential competitors are doing to generate traffic. This may not be enough when it comes to the world of the internet, but it could definitely make a difference, especially for new businesses and start-ups who have made major efforts to be where they are today. 

The Law Office of Giselle Ayala Mateus Can Help You!

The Law Office of Giselle Ayala Mateus is an innovative law firm focused on providing excellent legal services to start-ups, small businesses, and non-profits. Considering the multiple needs that these specific clients have and the challenges that they must overcome in today's world, the office offers a comprehensive portfolio of services covering the areas of Business, Intellectual Property, Internet, Advertising, Contracts, and Immigration Law. The first step is to schedule a free consultation!

About the Author

Giselle Ayala Mateus

Giselle Ayala Mateus is a NY attorney with comprehensive experience in transactional law, creative agreements, business formation, and immigration law. She is also the founder of FOCUS a not-for-profit project focused on supporting entrepreneurs and artists.


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