Tag Archives: How long do I need to keep my business contracts in California?

Business document retention guidelines


Posted by business records

Business document retention guidelines

Most of the small scale and medium sized business face the problem of safeguarding and keeping business documentation for legal and tax purposes. So what are the guidelines and compliance rules for maintaining and preserving documents?

Business document retention guidelines

Business document retention guidelines

The need of the hour is to know and understand how to bets deal with the storage situation while ensuring that all electronic correspondence and paperwork are safeguarded to preserve confidentiality. Thus, most businesses require business documentation retention guidelines for a smooth functioning from the legal and financial angle.

Basically the problem about preserving documentation arises when the company is unable to comprehend what the state laws say on business document retention, what will the IRS need and whether the Federal laws talk about something else.

Another factor that needs serious consideration includes the latest business document retention latest compliance guidelines for specifically preserving certain key information.

Business records retention program

Using a records retention program can be of assistance. These programs have been designed to review and retain the documents that have been created in the course of the business transactions. It does a systematic review of the document and identifies those that need to be preserved while comprehensive business records retention guidelines are maintained in its database to ensure that the management is aware about the decision of protecting certain documents and how they need to be destroyed.

Most of the legal and taxation related documents need to be stored for at least 10 years. This ensures that in case there is litigation or audits, your business has the relevant documentation. However, if you are in doubt or have concerns, talking to a lawyer or CPA can be of assistance. usually if you have filed a claim for refund or there is arbitration on a business matter, it is best to safeguard all documentation related to the specific matter and all documentation related to it require to be kept permanently.

 

 

 

 


How long do I need to keep my business contracts in California?


Posted by business records

How long do I need to keep my business contracts in California?

It is a very relevant question to know and understand the validity of the documents that you preserve. Do you need to keep all of the business documents for a lifetime? Will they still be relevant?

Business records

Business records

IRS suggestions for keeping business records

Most of the businesses do not know how long they need to preserve and document all of the records. As per the IRS, there are some aspects of keeping the business contracts. Some of the business contracts hat need to be kept permanently includes payroll records, journals and ledgers, financial statements, tax returns and related documents, mortgage, deeds, retirement plans and business contracts.

Those records that need to be kept for at least 10 years include the cancelled checks, bank records, vendor and customer billing information, leases and contracts with suppliers, AP and AR documents

Documents that need to be safeguarded for at least 7 years include inventory documentation, expenses reports, employee agreements and termination contracts, litigation related paperwork. But not all documents need to be preserved for a lifetime. According to IRS, some of the documents need to see the light of the day only for 3 years. Here are those- general business correspondence, insurance policies that have expired, employee applications, employee disability and illness benefits.

Although that is what IRS suggests but some of the businesses rule of the thumb still remains to keep all documentations for a lifetime or at least for 10-12 years in high security storage. As a LLC company, you need to adhere to the safekeeping of annual reports, meeting minutes and record keeping. Though there are software that can automate the tasks, security of business records is important.

Records maintenance as per California Law

As per the current law of California, laxity or failure to maintain your business and financial records maybe considered as negligence. And it could even be taken as a willful intent to evade taxation resulting in stiff penalties. This means that by adhering to California laws mean keeping all sales and tax records of the past years for at least 4 years, unless the company has written authorization from the Board for destruction of records.

But if your company is being audited by the taxation board, all of the business and financial records pertaining to the audited period will need to be kept till the audit is completed. For those that have applied for a refund, you will need to keep the records till the claim is received.