Ring in 2026 Right: Your Guide to Year-End Legal Planning for Your Business

Year-end is traditionally a time for looking back and planning ahead . . . in life, as well as in the course of your business. Included here are some things you will want to consider at the end of 2025, going into 2026.

Prepare for annual filings.

The year-end is the perfect time to consider whether you need to update information about your corporation, limited liability company, or other entity in the state of your organization, or any state in which you are qualified to do business. Some items you’ll want to review include:

• Address
• Agent for service of process
• Authorized shares
• Purpose

It is also a great time to review your business and determine if there are any states where your entity’s conduct of business will require it to register as a foreign entity.

While Ohio doesn’t require annual reports, other states, such as Delaware, Kentucky, Indiana, and Tennessee, do, and you should prepare for these filings for any entity that is organized or does business in those states. Likewise, in addition to income taxes, many states, such as Delaware and Tennessee, also levy franchise taxes on entities organized or doing business in those states.

Entities organized outside of the United States should also consider their filing obligations under the Corporate Transparency Act.

Don’t forget non-profit entities.

Many of the filings required of for-profit entities apply to nonprofit entities as well. There may also be additional filing requirements for non-profit entities.

Ohio (and many other states as well) requires charitable organizations to file annual reports. While Ohio requires these to be filed with the Attorney General, other states require filings with other offices, such as the Secretary of State or the Revenue/Tax Department. Ohio also requires nonprofit organizations organized or registered to do business in Ohio to file a statement of continued existence every five years, and other jurisdictions (such as Indiana) have similar requirements. 

Review your contract templates for issues related to the use of generative AI.

The increasing use of generative AI has raised a number of issues and contributed to a flood of litigation in recent years. Prompts and inputs may be subject to re-use by the vendor that provides your generative AI services as a consequence of provisions in your service or license agreement. Output produced by generative AI is not human-created and so is not copyrightable or patentable; it may also not be protectible as a trade secret for other reasons.

These twists on the historical notions of who owns what have implications for:

• Employment and contractor agreements
• Licensing agreements
• SaaS and technology agreements
• Marketing and advertising agreements
• Non-Disclosure agreements
• IP development and assignment agreements
• Data processing and privacy agreements
• Publishing and content creation agreements
• Purchase Orders/Terms and Conditions

The ownership issue and others you will want to address include:

• Transparency and consent – require disclosure of, and consent to, use of generative AI and contemporaneous recordation of prompts/outputs (if it’s important that you be able to own the output, it can’t be AI generated; if the end work product will be partially AI generated, you can own the human-generated portion but you will have to be able to describe and disclaim that which was AI-generated)
• Clear definitions of evolving terminology (e.g., prompts, outputs, and trained models)
• Required compliance with data protection, privacy, and AI-specific laws and regulations
• Clear specifications around who owns data and outputs, as well as which parties may use the same and with what, if any, limitations
• How parties will allocate the liability and indemnity for AI risks
• Vendor obligations to observe established security and risk management standards
• Client audit rights for ongoing oversight

Review your governance documents.

Has your company undergone any changes this year, or are you planning to make changes in the new year? Now is a great time to review your governance documents as part of your new year planning. Things to consider as you plan for the new year:

• Are your officers and directors up to date?
• Do your current buy/sell provisions in your governance documents align with your future plans for the company?
• Do your governance documents accurately reflect the current ownership of the company?
• Are there burdensome provisions in your governance documents that make it more difficult for the company to borrow money, pay debts, change leadership, or litigate?
• If your company is a limited liability company, does your operating agreement accurately reflect how your company is taxed (as a partnership or an S-Corp), or how distributions are made?

These are a few things to consider when reviewing your current governance documents in preparation for the new year. For a more comprehensive list, take a look at our article from earlier this fall.

Address these issues proactively and have a Happy New Year.