As 2025 comes to a close, California small business owners have a significant opportunity: review your legal and operational matters to ensure a smooth start to 2026. Taking a few proactive steps now can prevent complications, maintain compliance, and protect your business in the year ahead.
Act now to protect your business. Contact Purdy & Bailey, LLP online or call (858) 360-7080 for a review before the new year. Get in touch today.
Check Your Business Entity Status
Your business structure affects taxes, liability, and decision-making. At year-end, confirm that your entity is current.
- Verify your registration with the California Secretary of State.
- Ensure annual statements and filings are up to date.
- Ensure that your business formation documents accurately reflect your current ownership and management.
- Consider dissolving inactive entities to reduce unnecessary obligations.
Review Financial Records
Accurate financial records facilitate tax preparation, planning, and effective risk management.
- Check income, expenses, and outstanding invoices.
- Ensure that payroll records and employee classifications are accurate and up-to-date.
- Reconcile bank accounts to catch errors early.
- Back up financial records securely for future reference.
Audit Contracts and Agreements
Contracts are the backbone of your business. A year-end review helps avoid disputes.
- Check renewal dates, termination clauses, and obligations.
- Update vendor, client, and partner agreements as needed.
- Refresh non-disclosure or confidentiality agreements.
- Put any oral agreements in writing.
Update Employment and HR Policies
California employment laws change frequently. Staying compliant prevents penalties.
- Ensure employee records are complete and current.
- Review independent contractor arrangements.
- Check compliance with wage, hour, and leave laws.
- Update employee handbooks or policies as needed.
Protect Intellectual Property
Your brand and ideas are valuable. Make sure they remain protected.
- Confirm trademarks, copyrights, and patents are current.
- Review domain names and digital assets to ensure timely renewals or transfers.
- Assess the security of trade secrets and proprietary information.
Review Insurance Coverage
Insurance gaps can create risk for your business.
- Confirm coverage for general liability, professional liability, and workers’ compensation.
- Ensure that policies align with current operations and the current workforce.
- Discuss any necessary adjustments to your coverage with your provider.
Prepare for 2026
Planning ahead keeps your business on track.
- Set dates for quarterly legal and financial reviews.
- Schedule annual meetings for boards or partners if required.
- Plan for anticipated contracts, expansions, or operational changes to ensure seamless execution.
Conclusion
The end of the year is the perfect time to review your business’s legal and operational foundations. Small steps now can prevent bigger problems later and make 2026 more manageable.
Protect your business as you enter the new year. Contact Purdy & Bailey, LLP to review your year-end checklist, update formation documents, or address any other legal concerns. Call (858) 360-7080 or visit our contact page today.