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.
Many people have plenty of deductions that help with the taxes. Other peoplecreate deductions to be able to reduce the tax. However you go about thedeductions, the most important factor remains keeping everything safe, all thereceipts and supporting documents, in case you are asked to show proof to theIRS. There are several tax records that need to be kept as support forthe deductions.
Mortgage interest payments ? The best part about having a mortgage on the homeis that you have a paper showing the amount that you have been paying everyyear. Having this paper is not enough; this should be kept very safelyfor years.
Dependent support ? If you have shown that someone is a dependent, then youwill have to prove that you provide support for that dependent and that thesupport is more than 50%. People who are married do not have issues, butit's the divorced people that the IRS tries to catch. It is important tokeep all the records that are involved in providing this support.
Home repair receipts ? These receipts should be kept safe, although you willnot have to show these receipt each year. In case someone asks for thereceipts, you should be in a position to show them.
Medical expenses ? Receipts related to health should be kept if you are showingdeduction related to health care.
There are many other receipts that need to be kept, but by and large you shouldget a fair idea of what you should be keeping safely by reading theabove. You must ensure these and other important records be kept, to fallback on, in case of an inquiry.
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