Record Keeping for Your Business: What's Required?

Whether you are just starting up a new company or have a business that has been in operation for a while, good record keeping is an essential part of running your business. You are responsible for establishing an effective system to store and maintain your business records whether your small business is a sole proprietorship, partnership, LLC, or corporation. Some types of records will help you to keep track of business details and plan for your business’s future, but others are required by law. Here are some of the records your business may be legally required to keep.

Better Business Bureau. The Better Business Bureau℠ has a great PDF of records retention.

bbb_records_retention_schedule2.pdf

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Note: Although the information above regarding employee, tax, and injury records spell out what may be required under federal law, don’t forget to also comply with any state and local record-keeping requirements for these areas.

State Record-keeping Requirements for Business Entities. State laws governing various forms of businesses, such as partnerships, limited liability companies, and corporations, require that each of these types of businesses maintain certain records. For example, a partnership must usually keep a current list of the names and addresses of each of the partners, the partnership agreement, income tax returns, financial statements, and other documents dealing with the business. Similar requirements are typically in place for limited liability companies. Corporations generally must maintain more extensive and complex records to comply with state law.

Licenses and Permits. Most businesses need to obtain some form of license or permit to operate legally under local, state, or federal law. For example, hairdressers and doctors require professional licenses, businesses that sell goods or services must obtain a sales tax license or permit, and some federally regulated industries such as aviation, alcohol, or agriculture must obtain federal licenses or permits. Once you have obtained all the licenses and permits required for your type of business, you should retain them in your records, as you may have to show them on occasion.

Summa Business Law is Here to Help

If you need help navigating the maze of record-keeping requirements under federal, state, and local law or have other questions about managing or operating your business, please give Summa Business Law a call. As a business attorney, Utah business attorney, Paul Sparks, can provide guidance to help you comply with your obligations and avoid fines and penalties.