A Limited Liability Company (LLC) is a type of organization that shields the owners from obligation of the firm. Small Business owners generally prefer the LLC form of doing business due to its relative ease of formation and flexibility. The LLC record keeping requirements in some areas is not as stringent as the requirments of a corporation. Below are the essential record keeping responsibilities regarding LLC that you should know.
1. Organizational Specific Documents
LLC are required to keep all organizational formation related documents. In the formation documents include the article of organization and the operating agreement. The latter explains who is responsible to manage and operate the business. Although, having an operating agreement is not a mandatory requirement in all states, if you have one you need to keep a copy of it. Even if it is not required, it is recommended that you keep an operating agreement as it defines clear structure within the business and provides legal protection if problems occur between the partners.
2. Financial Related Documents
Apart from formation documents, LLC are also required to keep copies of financial records. The financial records may include bank and credit card transactions, receipts and payments, and financial statements. Asided from state requirements, there are federal tax requirements related to financial documents specify that the company should retain financial documents.
3. Regulatory and Tax Documents
Limited Liability companies need to keep copies of r tax returns. It is one of the federal mandatory LLC record keeping requirements. The management of the company should retain all tax related documents and EIN (Employer Identification Number) issued by the IRS. The LLC record keeping requirement includes maintaining the record at local, state and federal level.
4. Company Internal Documents
Finally, LLC record keeping requirement includes keeping certain company internal information. This includes details amount of contribution made by each partner, the percentage received by each partner and the voting rights of each partner.
In the end, you can simplify the task of LLC record keeping by having your documents properly organized and hosted for you. This will save both time and money and minimize any complications involved in properly keeping the required records and documents of the company.