There are few hard-and-fast rules about what type of records to keep. However, you need to save all papers related to your taxes as well as papers demonstrating that your business is legitimate and follows all applicable laws.
Articles of incorporation and business registration
Keep copies of this type of paperwork for the entire life of the business. Articles of incorporation contain all of the pertinent legal information about the business, and may need to be referred to from time to time. In addition, in the case of an audit, a company must demonstrate that the business was incorporated properly. It’s important to also keep copies of any registration forms such as the DBA form if a demonstration of legal rights to operate business under a chosen name is required.
Many businesses must be licensed by the state, county or city where they are located. Some licenses must be displayed prominently in the business location while others may simply be stored.
Copyright and patent notices
These notices give important intellectual property rights, so they should be held onto.
Year-end financial statements
It is required that these statements be available for investors and auditors to look at.
In addition to tax returns, copies of all receipts must be kept if it is intended to take any deductions for the business with them.
Invoices and payments
It is necessary to keep track of how much money the business is taking in and how much it is owed.
Save all current and former personnel records and information related to hiring, firing and promoting employees. Each employee or candidate should have a record. Save any disciplinary action reports, background checks and test results.
Keep copies of all correspondence with customers, other businesses and anyone else of importance. It’s especially important to keep copies of correspondence regarding complaints.
These are only a few of the standard types of records that businesses keep. Depending on the business and its needs, it may be necessary to keep other records, such as records of mortgages and deeds, insurance policies and purchase orders. If any of your employees are injured on the job, keep copies of accident reports and settlements.