As a business owner, you are required to keep several documents on file, from financials and tax papers to customer information. While most of these documents can be stored using a cloud-based storage system or a digital system, there are certain documents that you must always have on hand in hard copy.
Check out 10 documents that all business owners must have in physical format:
Document #1: Business registration
– Business registration documents contain essential details such as the kind of business you are registered as: sole proprietorship, partnership, LLC, or C Corporation.
Document #2: Business license
– Documents that carry original signatures or raised seals, such as a business license, should always be kept in hard copy. A business license or permit is required to operate a business, regardless of where the company is located.
Document #3: Company bylaws
– Operating agreements (in case of LLCs) and bylaws (in case of corporations) document an organization’s rules of management, responsibilities and ownership structure. These critical documents control reporting and access to the totality of the businesses’ documents and are typically not available through public records.
Document #4: Partnership agreements
– A partnership agreement spells out who owns what percentage of the company along with details of the profit and loss division.
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Document #5: Vendor agreement(s)
– Vendor agreements contain the terms and conditions of vendor relationships.
Document #6: Invoices
– Invoices can be used to handle any questions regarding billing. Keeping invoices and paper receipts is particularly important for physical store owners for at least 120 days. Buyers have up to four months from the date of purchase to raise a dispute about a transaction and file a chargeback.
Document #7: Confidentiality agreements
– This is another example of documents that carry original signatures, and should be kept in physical format. Confidentiality agreements are signed by any employees or contractors and usually contain sensitive information.
Document #8: Employment agreements
– Employment agreements include the terms of their employment and position, including a job description, compensation details, work conditions and so on.
Most of the time, independent contractors also sign similar documents as full-time staff members. Their contracts include information such as who has ownership of the completed work as well as other conditions.
Document #9: Privacy policies
– Many businesses often collect information from visitors to company events, digital marketing spaces or even offices. A privacy policy should always be in place detailing what you will and won’t do with their information.
Document #10: Project contracts
– Project contracts outline the scope and parameters of the projects. Physical copies come in handy in case of disagreements.
Lastly, even though there are no laws that dictate exactly which tax documents should be stored in hard copy format (according to IRS Publication 583), the IRS expects business owners to keep records that support an item of income, deduction or credit shown on a tax return until the period of limitations for that tax return runs out. The period of limitations is the period of time in which you can amend your tax return to claim a credit or refund, or the IRS can assess additional tax.
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