Maintain corporate records FAQs
Corporate records are the documents that show to the IRS and local governing agencies that your business is following required laws. Your corporate records may include:
Basically, you should save all business documents in case you need to prove your business is following the laws or if your business is audited by the IRS. Documents can be stored as paper copies, on a hard drive, or in the cloud. You should always backup your files in a secure location.
You may hear different answers to this question. To err on the side of caution, you should keep your business tax records for seven years. It is recommended that you keep a copy of your business returns longer. Some may say you can destroy the records sooner, but seven years will, in most cases, protect you should an issue arise.
Shredding documents can help you protect your client's information as well as your proprietary business information. For the most part, you should shred any document that you plan on throwing away. You should take extra effort to shred documents that may contain information such as Social Security numbers, credit card information, employee's private health information, payroll information, marketing strategies, new product information, protected vendor or client information, and more. You should also make sure to destroy or wipe electronic copies of the documents as well. Sensitive files saved on portable devices such as laptops, mobile phones and tablets should be password protected and encrypted.
Like tax records, it's best to store employment records longer than you may want to in order to protect yourself. Some say as long as five years after an employee is terminated. Federal, state, and local requirements may vary, but five years should cover most requirements. If your business operates in numerous regions, you may benefit from hiring an employment lawyer that knows the local laws well.
Many of your business documents are available to the public. With a minimal amount of effort, curious searchers could find your business license information, creditor information, lien information and more. Can people see an actual copy of your return? No, corporate tax returns are not public records. You can find more information if the company is publicly traded.