The month of February has started and 15th of April is not far off. It is the last date to file your income tax returns. Most landlords prepare to meet this deadline well in advance. If you have not put your documents in order till now, you can also ask for an automatic extension. Extension is a good way to save on penalties that can be levied if you do not file your returns in time.
The other deadlines
This article is not about income tax deadline. There are so many articles and news briefs about it that every landlord wakes up from his deep slumber to be able to file his returns before this date. This is about other deadlines that are equally important but do not attract so much of media attention. In fact, there are a few deadlines that are never talked about by anyone. As a landlord, you are expected to remember their dates. Missing these deadlines can accrue losses to your business and so it is in your own interest to remember them just like you remember the deadline for income tax return.
The business entity
When you started out as a real estate investor, you must have constituted a body or structure for your business. This is usually done to run business smoothly and to pay the taxes accordingly. Two of the most common types of business bodies are S Corporation and LLC. There are many reasons why real estate investors love these two types of business structures. For one, their businesses appear to be more professional and secondly, they get to enjoy certain degree of anonymity. S Corporations and LLCs also provide for asset protection to investors. However, it is not that you can simply set up your business structure and then forget about it completely. They have to be maintained according to the provisions of the law on yearly basis. This is where the deadline for the structure of your business comes into picture.
The date on which you set up your LLC and got it registered in your state is the deadline that you need to remember. To make sure your LLC remains active and operational, you are required by your state to file a fee every year on the same date. State department usually sends a notice to the owner of the business to file the annual registration fee. Failure to do so will result in cancellation of registration of your business entity as its certification is revoked by the Secretary of State of your state. You cannot afford to see that your business entity ceases to exist, can you? Therefore, it is so important to remember this deadline.
Depending upon the structure of your company, you must organize some meetings annually. Business bodies need to organize meeting for their shareholders and to elect office bearers. You must remember the deadline for this important meeting and record minutes of this meeting. These minutes have to be kept safely in a place to be retrieved whenever asked by the authorities. There is no fixed day of the year to organize these meetings. But you cannot ignore this requirement as it can lead to cancellation of registration of your LLC or S Corporation.
If your business entity ceases to exist, you lose your corporate shield. If someone gets injured in your workplace and sues you for compensation, you can tell the court that your business is an LLC and you own no responsibility for the loss suffered by the victim. The court summons the records of your annual meetings. If they are not found, you are held responsible for the losses and the judge can take away your personal assets to settle the claim.
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