Annual Legal Check-Up: What Business Owners Should Review Each Year
Leading a business without an annual review is a bit like driving a car without looking at the dashboard – you’re moving forward, but you have no idea if your engine is overheating, if the oil change is due, or if you have enough gas to get to where you’re going.
Like your car’s maintenance schedule or your annual health physical, your business needs a legal check-up annually, too. Doing so will keep your business in good standing, avoid potentially costly penalties as regulatory landscapes shift, and protect your assets and reputation.
The financial review, tax planning, business strategy, market positioning and staffing are the “fun” things to review, but here’s a breakdown of some of the essential legal items you should review annually.
Corporate Governance, State Compliance and More
Even small businesses need to observe some corporate formalities to stay in check and avoid any potential penalties. Keeping this documentation up to date also helps to further protect you in case of a lawsuit—making sure that any liability is contained to the company and doesn’t place your personal assets at risk.
Ensure that all business licensures, permits and corporate files are up to date.
Review operating agreements or bylaws and shareholder/member control agreements to ensure they reflect current ownership, roles and guidelines.
Discuss your current entity structure with legal counsel to ensure it’s still the best fit for your business today and for future growth plans.
Confirm meeting minutes, even for single-member LLCs, are documented for major decisions for your legal protection.
Review your business insurance to make sure it matches the size of your business today.
As with personal estate planning, your business needs a succession plan in case something happens to you. Make sure your personal estate plan works together with your business succession plan.
Employment & Labor Law Audit
Labor laws are amongst the fastest-changing laws in recent years. What was legal last year may be a liability today.
Employee Handbook Updates: Ensure your policies reflect 2026 mandates regarding pay transparency, workers’ rights and leave policies, just to name a few. This is particularly important right now, as employment laws in Minnesota have undergone dramatic shifts over the past few years.
Workplace Posters: Laws require specific labor posters to be displayed physically or digitally. Are yours posted?
Independent Contractors: Make sure that any staff that you treat as an independent contractor has an up-to-date contract and that you follow the requirements of that agreement. Straying from the strict independent contractor structure can make you legally required to give someone employee benefits even if you didn’t think they were an “employee.”
Contract & Agreement Review
Contracts are living documents. As we’ve shared in a former case study, “handshake agreements” can get in the way of payments.
Businesses should review their vendor and client list to identify who they are working with without a signed, written agreement and move those to formal agreements immediately.
Review vendor contracts to ensure your protection.
Are you using AI in your work? If so, are your clients aware and have they given their permission? Make sure the use of AI is addressed in your contracts.
Review all client facing contracts to ensure they adequately protect your rights and are enforceable if the relationship ever turns sour and you need to rely on the contract’s terms.
This list comprises of high-level legal items to be reviewed annually; however, every business is unique so with that comes varying legal items to review to ensure your business is operating optimally and protected to the fullest extent possible.
Our business law attorneys can provide your business with a legal review whether it’s a start-up, emerging business, or a thriving business that you’re ready to scale up. Contact our business law attorneys today if you’re ready for your annual legal check-up.
Want to read more? Here are other Blethen Berens articles to review when thinking about the health of your business.