SLA is serious about record keeping

New York Alcohol Beverage Control Law requires licensees to keep their business books and records in order. Did you know that failure to have your corporate minutes up to date can result in fines from the SLA? In 2012, a significant percentage of the charges brought by the SLA included books and records violations with fines ranging between $ 2,000 and $ 10,000. Some egregious cases resulted in revocation of the license, prohibiting the licensee and its principals from having a liquor license for two years (possibly permanently if there is other history of other violations). Similarly, failure to keep up with required price postings resulted in loss of 2 months of sales plus $120,000 fine for at least one wholesaler.

There are easy ways to stay in compliance. In addition to traditional services provided by lawyers and accountants, there are many software and online services for the do-it-yourselfers out there. For most businesses, the cost is less than $250 annually for standard annual meeting minutes by their regular attorney. Briefly, annual meetings should appoint and elect directors and officers, approve major business transactions of the company that were not approved at a previous meeting (ratifying past transactions) and set salaries of executives. In many cases, it is possible to use a “consent in lieu of a meeting” where the required people sign a document that they consent rather than actually hold a face to face meeting.

This is a small annual investment to keep your business in compliance with not only the SLA, but other regulatory agencies as well. For comparison, a $250 investment in annual meeting minutes can prevent a fine of more than ten times that cost. Minimum liquor license fines tend to be around $2,500, so a 10% investment can avoid both that fine and the likely equivalent cost for attorney defense fees of $2,500. Paying $250 avoids paying $5,000. This is a no-brainer. It will also preserve the value of your business when you transfer it to a buyer (including transfers upon death to your heirs). Incomplete corporate records can hamper a successful transfer, causing significant delay and expense.

Knowing the benefits and possible dangers in not doing your corporate paperwork, I urge you to find an hour to get this off your business yearly to-do list. Or call us to do it for you. We’d be happy to help. You probably hire some to come spring clean your business (rugs, curtains, etc.) each year. Let us keep your books and records clean for each year you are in business.