Corporate Recordkeeping for Small Business Owners

Fondos_archivo.jpgA business entity created under the laws of New Jersey or another U.S. state is, at the most basic level, a collection of legal rights and obligations aimed at specific business activities, usually with the goal of making a profit. Those rights and obligations depend on a substantial number of agreements that should be reduced to writing and stored where a business owner can easily find them.

The following list includes 15 types of documents you should keep with your business records. You might need any of them if you have a disagreement with a business partner, co-owner, contractor, or employee, if you want to do business with a government agency, if you are looking for venture capital or other new investors, if you are trying to wind the business down, or simply in preparation for the unexpected. A few ounces of paper might be worth many pounds of future regret.

1. Formation Documents

Forming a business entity requires filing documents with the state and paying a fee. In New Jersey, the Department of the Treasury’s Division of Revenue and Enterprise Services handles business formation. A document forming a corporation is often known as a Certificate of Incorporation, while one creating a limited liability company (LLC) is known as a Certificate of Organization.

2. Bylaws and Other Governing Documents

Every business needs bylaws or regulations that govern voting rights for shareholders or members, as well as matters like the election of directors or managers.

3. Foreign Registration Documents

A business must register with every state, known in this context as a foreign jurisdiction, in which it maintains a business presence.

4. Initial Resolutions

The very first actions taken by the shareholders or members of a new business, such as appointing the initial Board of Directors, should be put in writing.

5. Stockholder or Member Agreements

The initial and future owners of the business need a written agreement defining their rights and responsibilities.

6. Minutes

Businesses should keep minutes of their shareholder or member meetings, as well as all director or manager meetings.

7. Resolutions

Any actions taken at these meetings should be reduced to writing and signed.

8. Ledgers and Schedules

Officers of a corporation or LLC have a fiduciary duty to the shareholders or members to maintain accurate records of their ownership interests.

9. Capitalization Tables

A business should track the value and status of any and all securities and other equity interests.

10. Certificates

Not every corporation issues actual stock certificates anymore, but those that do must keep copies.

11. Financial Reports

Periodic accounting statements are essential to determining a company’s financial condition.

12. Tax Forms

All business entities must file tax statements with state and federal governments.

13. Reports Filed with the State

New Jersey and many other states require corporations, LLCs, and other business entities to submit statements or reports regarding business activities.

14. Intellectual Property

Businesses may obtain patent, trademark, or copyright protection for their intellectual property (IP), or they may obtain assignments of IP rights from shareholders, members, or employees.

15. Employment and Contractor Agreements, Employment Policies

Businesses must take care to comply with state and federal employment laws, and they should maintain consistent standards for employee and contractor relations.

Small business attorney Samuel C. Berger represents New York and New Jersey entrepreneurs and businesses in a wide range of legal matters. We offer fixed-fee packages of legal services that enable our clients to understand their rights and obligations as business owners. Contact us today online or at (212) 380-8117 to schedule a confidential consultation with a knowledgeable and experienced advocate.

More Blog Posts:

Benefit Corporations Allow New York and New Jersey Businesses to Combine Profits with the Public Good, New York & New Jersey Business Lawyer Blog, August 4, 2014
What Does It Actually Mean to Say a Corporation Is a “Person”? New York & New Jersey Business Lawyer Blog, July 21, 2014
New York City Sets Aside Over $1 Million for Worker-Owned Cooperative Businesses, New York & New Jersey Business Lawyer Blog, July 7, 2014
Photo credit: By Archivo-FSP (Own work) [GFDL or CC-BY-SA-3.0-2.5-2.0-1.0], via Wikimedia Commons.