I was conversing with a tax accountant about a small business client who was being audited by the IRS and did not have their business legal documents organized or available.
If you received a letter from the IRS, are you prepared to present the legal documents for your business? What about the documents to present for a loan to expand operations or to sell your business?
My Business Organization Process for Clients
Here is a list of the basic documents you should have organized in one place and ready when necessary. The following documents should be kept in an electronic form, with the originals stored safely.
Since a sole proprietor is not a legal business structure or entity, you should have the items listed in item 4.
1. Corporation
Article of Incorporation
Bylaws
Board of Directors Meeting & Minutes
Shareholders Meetings & Minutes
Stock Owners List & Certificates
2. Limited Liability Corporation (LLC)
Article of Organization
Operating Agreement
Member List & Certificates
Members Meeting and Minutes
3. Partnership
Partnership Agreement
4. All businesses should have the following documents kept in the same folder.
Federal Tax Identification Number
List of business property
Tax returns for the last 6 years
Accounting records for the past 4 years
Is it a pain to compile these records? YES!!!! For the most part, you’ll only need to do it once to protect your business.
Keep these documents organized for your peace of mind, and make it your goal to schedule a time to organize your business legal documents within the next 30 days.
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