There is a lot of paperwork that goes into the formation of your business… and it doesn’t end there! It is important that you document the actions of your business throughout the year and organize important paperwork into an organized company record book.
What documents should be in a record book and what documents are required to be maintained by the company?
The documents that should be in your record book will depend of the type of entity you have:
Documents in an LLC Record Book
A limited liability company record book will contain LLC formation documents such as:
- Articles of Organization
- Operating Agreement
- Organizational Resolutions
- Unit Certificates
A limited liability company must also maintain:
- a list, in alphabetical order, of each past and present member and, if applicable, manager (including, full name, last-known mailing address, the date on which the person became a member or manager, and, if applicable, the date on which the person ceased to be a member or manager;
- a copy of the Articles of Organization (and all amendments to those articles);
- copies of all operating agreements (and all amendments to operating agreements and any operating agreements no longer in effect);
- copies of federal, state, and local income or franchise tax returns and financial statements for the 4 most recent years or, if such returns and statements have not been prepared, copies of the information and statements provided to (or which should have been provided to) the members to enable them to prepare their federal, state, and local income tax returns for the 4 most recent years; and
- unless already provided in the operating agreement, record of the value of each member’s contribution made to the company, the times at which or the events upon which any additional contributions are agreed to be made by each member, any events upon which the company is to be dissolved and its business wound up, and any other writings required by the operating agreement.
Although Wisconsin’s statutory requirements regarding maintaining records for a limited liability company are less-strict than for a corporation, and other corporate formalities are not required (e.g., annual meetings), a limited liability company is still required to maintain a record of certain documents, and following similar formalities as required for a corporation can bolster liability protection provided by Wisconsin laws pertaining to limited liability companies.
Documents in a Corporate record book
A corporate record book will contain organizational documents such as:
- Articles of Incorporation
- Organizational Resolutions
- Stock Certificates
Your record book should also contain other documents that the company deems important for example: leases, asset purchase agreements, etc.
Additionally, a corporation must maintain appropriate accounting records, a record of its shareholders and shareholder agreements (including, names, addresses, and number and class or series of shares held by each shareholder), and keep permanent record of the following:
- minutes of meetings of its shareholders and board of directors;
- records of actions taken by the shareholders or board of directors without a meeting; and
- records of actions taken by a committee of the board of directors in place of the board of directors and on behalf of the corporation.
Those records must be maintained in written form or in a form that is capable of being converted into written form within a reasonable time. Further, within 120 days after the close of each fiscal year, a corporation must prepare annual financial statements, which must be sent to the corporation’s shareholders upon written request.
Why is it important to have a record book and keep it up to date?
In addition to making sure your company’s records are complaint with applicable law, if you are applying for a loan, preparing to sell your business, or being audited by the IRS, the person or institution will likely request these documents to make sure that your business’s records are complete and are being maintained in accordance with applicable law. It is much easier to maintain your record book every year than to have to try to remember what happened each year that you didn’t prepare an annual resolution.
How Gerbers Law Helps Keep Your Record Book Up to Date.
Keeping your record book up to date is an important step that your business should take each year to avoid future headaches. We know that life can get busy, and this can easily slip your mind or fall to the bottom of your work to do list. Our Gerbers Law staff assists in keeping record books up to date every year by sending/emailing yearly questionnaires, drafting resolutions, and filing your Annual Report with the WDFI.
For any questions that you have regarding your company record book please give us a call today at 920-299-5700.