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Vital Corporate Records That Must Be Kept Secured

Article Summary: After you have created a company of your own, you must maintain and keep important corporate records. Corporation and Limited Liability Company documents, including bank account records, must always be updated and kept secure.

After you have created a company of your own, you must maintain and keep important corporate records. Corporation and Limited Liability Company documents, including bank account records, must always be updated and kept secure.

In most states, companies are required to have the record ready for regular inspection. Hence, corporate attorneys have all the responsibility to keep them secure.

In every state, shareholders have a right to inspect the records of a corporation. The scope of inspection depends on particular laws of each state. Corporate record inspection typically covers all records in the corporate books, balance sheets, and even tax returns.

Although records of each entity are different, they all serve the same purpose, which is the repository of information in business. As an example, an article of incorporation and an article of organization may be two separate documents, but they have striking similarity in use and purpose.

Corporate records vary with each state but they all require you to keep only a handful of the record. In California, however, the following list applies to corporation as well as to limited liability equivalents:

1. Articles of Incorporation – An important document establishing the existence of the entity with the relevant Secretary of State

2. Bylaws – The rules of the corporation. Essentially, the bylaws set out how the corporation will be administered and operate from a procedural perspective, the rights of shareholders, how meetings will be called 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 particular courses of action for the business. The record also names the directors who sponsored each resolution.

4. Minutes of Shareholder Meetings – This contains what transpired during the meeting and details the action of the shareholders on a certain issue or discussion.

5. Annual Meeting – Every state requires a corporation to have at least one meeting of the board of directors each year. Keep these in your corporate book.

6. Shareholder Communications – Copies of all communications to shareholders. Most states require you to hold these for three years, but you should keep these permanently to guard against future shareholder lawsuits.

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

8. Annual Report – Most states require you to file an annual or bi-annual report with the Secretary of State. Keep copies of these in your corporate records. Most states provide a pre-printed form of this document.

9. Balance Sheets – Shareholders have the right to inspect the finances of the corporation, although this right has limitations. You need to keep up to date balance sheets.

10. Tax Returns

In California, most corporate law attorneys keep a record of these important documents and update the entries in it from time to time.

How long should they be kept in their possession?

Some corporate lawyers keep the record from three to five years or until such time when business is eventually sold and the documents are being handed over to the new owners.

Article Source: http://www.upublish.info

About the Author:
Manuel Salvacion
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