Corporate Records What to Hold

March 28, 2013 robot Uncategorized

Whether youve developed a corporation or restricted liability firm, you should keep records. Heres a primer on the fundamental corporate records you want to preserve.

Corporate Records

When forming a corporation or limited liability business, you are making an entity independent from oneself. In so performing, this independent entity ought to take actions for itself, not you. For instance, a corporation will have a corporate bank account through which all revenues and debt payments are handled. As a shareholder, even with a single shareholder entity, you will not pay person expenditures out of the corporate bank account. This concept extends to record keeping.

For the objective of this report, I am taking into consideration both corporation and restricted liability organization documents as corporate records. Although the records of each entity have diverse names, they serve the same purpose. For instance, articles of incorporation for a corporation serve the same purpose as Articles of Organization. The following list applies to corporations, but you can apply the list to the restricted liability equivalents.

Although every single state has distinct records requirements, all demand you to preserve the following records.

1. Articles of Incorporation The charter establishing the existence of the entity with the relevant Secretary of State.

two. Bylaws The rules of the corporation. Primarily, the bylaws set out how the corporation will be administered from a procedural perspective, the rights of shareholders, how meetings will be known as and so on.

3. Board Resolutions These are resolutions passed by the Board of Directors from time to time, such as defining classes of corporate stock and approving certain courses of action for the business.

four. Minutes of Shareholder Meetings

five. Annual Meeting Every state calls for a corporation to have at least one particular meeting of the board of directors every year. Preserve these in your corporate book.

6. Shareholder Communications Copies of all communications to shareholders. Most states need you to hold these for 3 years, but you should preserve these permanently to guard against future shareholder lawsuits.

7. Shareholders A list of shareholders and the shares they own.

eight. Annual Report Most states demand you to file an annual or bi-annual report with the Secretary of State. Keep copies of these in your corporate records. Most states offer a pre-printed form.

9. Balance Sheets Shareholders have the appropriate to inspect the finances of the corporation, despite the fact that this correct has limitations. You want to maintain up to date balance sheets.

10. Tax Returns

So, how lengthy should you preserve these corporate records? Some attorneys will tell you three or 5 years. Personally, I feel you ought to preserve them permanently. If a shareholder dispute happens, you dont want to testify you via away a document. If the company is ultimately sold, the buyer is going to want to see all corporate records. Either way, you are far better off holding on to all records.

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