How Long to Keep Business Records
Most business owners don’t know how long they should hold on to old records. According to the IRS, here’s how long you should keep those records:
Permanently:
- general ledgers and journals
- payroll records, including W-2s, 940s, 941s
- year-end financial statements
- tax returns and supporting documents
- articles of incorporation, bylaws, meeting minutes, etc.
- retirement plan records
- mortgages and deeds
10 Years:
- bank statements and cancelled checks
- AP & AR documents
- invoices and billing information (customers and ventors)
- leases
- contracts with clients and suppliers
7 years:
- expense reports
- employee agreements/contracts/termination records
- documents related to litigation
- inventory documentation
3 years:
- employment applications
- employee disability and illness benefit records
- expired insurance policies
- general correspondence
This information is helpful but our favorite rule of thumb is to “save everything” and keep anything older than a few years in storage. Unless your business deals with mountains of paperwork, that method will be the easiest way to keep it simple and safe.
Action Plan:
- Organize your documents by the various categories above.
- Scan copies of the critical documents and place them in a free Dropbox account which will keep your files safe and backed-up “in the cloud” (Free up to 2GB of data)
- If you are a Corporation or LLC, then also make sure that you are complying with record-keeping, minutes and annual reports. Click here to learn about our ComplianceLock™ service which can automate these tasks.
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on Thursday, August 29th, 2013 at 2:00 am and is filed under Small Biz Management, Starting A Business, Uncategorized.
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I’m looking for information for a company that is liquidating and need to know the lenth of time we need to keep records after the business no longer exists. Ther does not seem to be any information on this topic out there.
please note that in case of liquidation of a company the records should be kept for a period of six year from the end of accounting period
A business that still had services that I could use and paid for went out of business. Another company took over the clients of said company to boost their client base and was fulfilling the the contracts that were made with the previous company they didn’t receive any monetary compensation for doing so but did gain clients. I want to know how long a company is suppose to keep their records for something like this. They absolutely don’t have any record of me as of 2008 so I am wondering if they are required to keep them for a certain length of time.
I have lost my corporate minutes book. what should I do?
Does a new ownership that purchase a business need to keep the old record prior to purchase or should the old owner (seller) take those records and maintain them?