Every business, regardless of the niche, industry and nature of operations, deals with considerable paperwork, documents, and electronic data on a regular basis. Several local, state, and federal laws require businesses to retain documents for a specific period of time, and these requirements can vary. Having a document retention policy is of extreme importance, because it is hard to keep up with the compliance needs, and storing everything forever doesn’t really make sense and has inherent risks. In this post, we are discussing further what record retention means for businesses.
Does record retention matter for my business?
Yes, absolutely. Think of this – What if the IRS asks to furnish a few documents? What if you have a lawsuit that requires specific documents? The idea of having a document retention policy is to ensure that there is a means to manage, locate, handle and destroy documents as required. The good thing is there are special tools and retention managers that can help in compliance and keeping records as required. If you don’t want to end up in a situation where it can take days to manage and find a particular record, you need to find a way to automate and simplify the process, and that’s where these tools come in handy.
Things to know
Depending on the nature and type of your business, the state laws can vary. In general, corporations often have to keep more records than a standard LLC. Corporations must have a few documents on-site, such as Annual Reports, Articles of Incorporation, Names and Address of Directors and Officers, and so on. On the other LLCs also need to keep certain records in-house, such as Articles of Organization, Operating Agreement, and Name and Address of Members/Managers. It is not just about compliance alone. Businesses need to maintain their corporate veil, so as to prevent disputes and lawsuits, and records may have a big role, in case something negative crops up.
Check online now to find more on record retention policy and how the laws impact your business. In any case, there is escaping from having a schedule in place.