May is National Small Business Month, a time to recognize the entrepreneurs and business owners who power our economy. According to the U.S. Small Business Administration , small businesses make up 99.9% of all U.S. businesses, and employ nearly 45.9% of the private workforce. At The SJS Law Firm, we know National Small Business Month is not just about celebration; it’s a reminder to strengthen the legal and operational foundations that support long-term success. This month, we’re highlighting key legal considerations every small business owner should review to stay protected and positioned for growth. 1.Business Formation & Structure The legal structure of your business is not a one-time decision; it is a strategic foundation that should align with your operations, risk exposure, and long-term goals. While limited liability companies (LLCs) are often favored for their flexibility, corporations may be better suited for businesses seeking outside investment, and simpler structures such as sole proprietorships or partnerships may carry increased personal liability. As your business evolves, an outdated structure can create unnecessary risk or missed opportunities. The SJS Tip: If you’ve experienced growth, added partners, or changed how you operate, it’s a good time to reassess whether your current structure still aligns with your needs. 2. Contracts & Agreements Contracts are the backbone of business operations. Every relationship, whether with clients, vendors, or employees, should be clearly documented. Poorly drafted or informal agreements can lead to disputes, nonpayment, or unenforceable terms. The SJS Tip: Avoid “one-size-fits-all” templates. Contracts should reflect your specific business practices and comply with state law. 3. Employment Compliance Employment law continues to evolve at both federal and state levels, impacting wages, classifications, and workplace policies. Misclassification or noncompliance can lead to audits, penalties, and lawsuits. Areas to monitor: Wage and hour compliance Anti-discrimination and harassment policies Artificial Intelligence policies Employee handbooks and leave policies The SJS Tip: Regularly review your policies and classifications, especially if your workforce structure has changed. 4. Intellectual Property Protection Your brand and ideas are valuable assets that deserve protection. Failing to protect your intellectual property can result in lost revenue or worse, losing rights to your own brand. Common forms of IP include: Trademarks Copyrights Trade secrets The SJS Tip: Treat intellectual property as a long-term business asset, not a one-time task. Regularly assess what needs protection, align your IP strategy with your growth goals, and implement clear policies and agreements to safeguard your brand, content, and confidential information as your business evolves. 5. Risk Management & Liability Prevention Legal risk is an inherent part of doing business, but proactive planning can significantly reduce exposure, particularly as regulatory requirements continue to evolve at both the state and local level. The SJS Tip: Effective legal support is most valuable when engaged early, not only when challenges emerge. We’re Here to Help At The SJS Law Firm, whether you’re launching a startup, scaling operations, or navigating compliance challenges, our firm provides practical, strategic legal guidance tailored to your business. Contact us at (202)-505-5309 to schedule a consultation. Small Business Events 2026 Small Business Advancement Conference Date: June 4, 2026 Location: Baltimore Convention Center, 1 W Pratt Street, Baltimore, MD 21201, United States Networking, capital access & business support. Click here to register . GovCon Small Business Summit Date: July 1-2, 2026 Location: Carahsoft Conference & Collaboration Center, 11493 Sunset Hills Road, Reston, VA 20190 Federal contracting & networking opportunities. Click here to register .

As tax season approaches, small businesses often focus on filing deadlines, but one of the most important tax planning tools is often overlooked: your operating or partnership agreement. Partnerships and multi-member LLCs are widely used for business and investment activities due to their tax advantages, particularly pass-through taxation. They generally do not pay federal income tax at the entity level. Instead, income, deductions, gains, and losses pass through to the owners, making governing documents essential for allocating and managing tax obligations. Understanding the Tax Structure Partnerships and LLCs taxed as partnerships must allocate their tax items to owners annually. Each partner or member receives a Schedule K-1 , which reports their share of the entity’s income, deductions, and credits. Even if no cash distributions are made, owners are still required to report their allocated income on their individual tax returns. This makes it essential that agreements address how tax burdens will be handled. For additional information related to Schedule K-1 and Partner’s Instructions for Schedule K-1, click here. Three Key Tax Considerations to Address in Your Agreement 1. Guaranteed Payments to Partners: Guaranteed payments are payments made to partners for services or the use of capital that are not dependent on partnership income. These payments are generally deductible by the partnership, treated as ordinary income to the receiving partner, and must be reported based on the partnership’s tax year, even if paid later. Clearly defining guaranteed payments in your agreement helps ensure consistent treatment and avoids confusion during tax reporting. 2. Allocation of Profits and Losses: While many businesses allocate profits and losses based on ownership percentage, partnerships may adopt alternative allocations if structured properly. Your agreement should clearly define allocation methods, ensure allocations align with economic reality, and anticipate potential tax implications if allocations are challenged. 3. Tax Basis and Partnership Liabilities: A partner’s ability to deduct losses and receive distributions depends on their tax basis in the partnership. A partner’s basis increases with contributions and their share of liabilities. Classification of liabilities (recourse vs. nonrecourse) affects how the basis is calculated. Basis limitations may restrict the ability to claim losses. Your agreement should address how liabilities are allocated and classified to avoid unintended limitations. Upcoming Tax Filing Deadlines for Businesses As part of your tax season compliance review, ensure that required tax filings are submitted on time: Maryland Entities: Most taxes must be filed and paid electronically through the Comptroller’s systems , including the Maryland Tax Connect portal. Filing Corporation Taxes: Form 500 must be filed by the 15th day of the 4th month following the tax year end (April 15 for calendar year filers). Filing Pass-Through Entities (PTE) Taxes: Form 510 is due by the 15th day of the 4th month following the close of the tax year. If the PTE has elected to pay tax at the entity level, Form 511 is also due on the same date. For calendar-year entities, this is typically April 15th. Extension of Time to File: Maryland corporations may request up to a 7-month filing extension with Form 500E , and PTEs may request up to a 6-month filing extension with Form 510/511E. DC Entities: Small businesses in DC are generally required to file and pay most taxes electronically through the Office of Tax and Revenue’s online portal, MyTax.DC.gov. Filing Corporation Taxes: DC corporations, including LLCs electing corporate federal treatment, must file Form D-20 on or before April 15, 2026, for calendar year filers or before the 15th day of the fourth month following the close of the taxable year for fiscal year filers. Filing Pass-Through Entities Pass-Through Entities (PTE): Partnerships and LLCs taxed as partnerships must file Form D-65 on or before April 15, 2026, for calendar year filers or on or before the 15th day of the fourth month following the close of the taxable year for fiscal filers. Extension of Time to File: DC businesses may request a 6-month filing extension for Form D-20 using DC Form FR-120 and for Form D-65 using Form FR-165 , respectively, no later than the return due date. An extension of time to file is not an extension of time to pay. You must pay any tax liability with the extension request, otherwise the request will be denied, and you may be subject to penalties for failure to file or failure to pay. We Are Here to Help At The SJS Law Firm, we support businesses in navigating tax compliance and minimizing risk through proactive planning. Contact us at (202)-505-5309 to schedule a consultation.