Companies employ the skills of a CPA’s or an attorney for 2 important reasons:
To know your company’s financial standing and
To ensure its compliance in meeting financial obligations towards the local, city, state, and federal taxing authorities
The financial status of a business is a major factor that members of the board would take into account in finalizing any decision or resolution that would go into the company’s records book.
Keep records of all shareholders and stock transfer ledger.
Your records must include:
the name
contact number/s
class of stock that each shareholder owns
along with the copy of the shareholders’ agreement and other ownership documents
any resolutions concerning preferences or limitations of one or more types of stock shares made by the board
2
Keep records of all financial transactions and reports
In general, records of the corporation’s finances should be kept for a period of at least three (3) years and these include:
Accounts Payable and Accounts Receivable ledgers
Bank statements and reconciliations
General ledgers
Balance sheets
Receipts
Cash Disbursements
and Cancelled Dividend Checks
These should be kept for an indefinite period of time.
Note: Make sure to consult a CPA or an attorney before you decide to purge certain financial records.
3
Keep copies of all local, state, and federal tax returns
Generally, just like all financial transaction and reports, you should keep your corporate tax returns for a period of at least three years.
This is the allowable period when you can amend tax returns.
The IRS recommends while employment records should be kept for four years from the date that the tax was paid or the date when it was due (whichever is later).
Any record of items claimed for depreciation should be kept as long as the item is still depreciating. For instance, if a corporation claims depreciation of assets on a certain period, any records relating to the purchase of the assets should be kept within that timetable.
