Not all documents are necessary to save in your permanent business records. But some are, and failing to hold these critical documents today can cause a business owner a heap of headaches and even potential fines and penalties in the future.
Key Business Documents to Save
Keep each of the following five types of documents for as long as your business exists.
It’s critical to keep your business’s governing document safe and secure if there are ever any questions or disputes about how your business is supposed to operate. Bylaws contain procedures for handling vital matters like annual meetings and voting in board members.
Leases lay out your rights and responsibilities to all lessors of equipment and space to your business as well as their rights and responsibilities to you. Keeping this information safe is critical in case of any questions or disputes.
Keep all permits that allow your business to operate, including those issued by local, state, and federal government bodies and industry authorities.
4. Shareholder Agreements
These documents contain many key provisions detailing how shareholders may and may not be involved in your business’s operation, including shareholder protections, your duties to shareholders as the business owner, and rights of first refusal.
5. Tax Records
Tax records are vital for tracking the current state of your business’s finances and the financial progress of your business over time.
How to Store Business Documents
When storing vital business documents, there are certain things to do and not do to keep them safe.
- Store as many of your documents as you can digitally in the secure cloud.
- Organize your documents into folders and categories that make sense and can be easily navigated.
- Devise a simple, logical, and consistent naming system for your files and folders.
- Back up all your documents in a hard drive, like a portable hard drive or USB thumb drive.
- Count on a hard copy of the document, as in the physical, paper document itself, to keep the information it contains secure.
- Delay more than a week after a document’s receipt or creation before saving it.
- Use more than one software system to store your documents, if at all possible.
Scott Boyar, CPA, is a small business tax advisor and CPA for small businesses in Charlotte, North Carolina, and its surrounding parts. Both a licensed bookkeeper and CPA, Scott can help with your North Carolina small business’s essential documents and other financial needs, not just in tax season but all year round.