Your Company Record Book- What is it and What Should be in It?
When a new company is formed, attorneys tell them to “Put that in your company record book,” or “Make sure you keep a copy of that in your record book.” It’s as if this record book is the most vital part of a young company (arguably it is)…but just what is a record book?
First of all, know that a “Company” record book and a “Corporate” record book are the same thing. LLCs and Partnerships aren’t technically “Corporations” but they need record books just the same.
There’s no secret to a company record book, it’s simply a book (usually a 3 ring binder) that houses your important company documents. It’s imperative to keep all of your docs in one place so that you have a central and safe place to find them.
Here’s the thing, locating and reviewing company documents usually only becomes critical twice in a company life cycle – when there is member/shareholder/partner dispute, or when you’re selling the company and the buyer needs the docs for due diligence. None of these times are when you want to find out that you can’t find important documents.
Here are the docs that we recommend our clients put into a company record book (or what we put in their book if we assist with the formation of the LLC):
- Certificate of Formation
- Organizational Meeting Minutes (or written consent in lieu of)
- LLC Operating Agreement/Bylaws/Partnership Agreement
- Buy/Sell Agreements for LLCs or Corporations
- Shareholder’s Agreement (only for Corps, and not all Corps need this to start
- Documents reflecting ownership of LLC Interests/Share certificates
- Employee Identification Number form
- Trade Name Registrations (if any)
- Any bank account information
- Resolutions or consents for important decisions
- Updates to ownership interests/shares
- Important company contracts
- Employment agreements
As a general rule, make a copy of everything – stamp it as “COPY” (or write “COPY” on it in blue ink) and send it to your attorney for safe-keeping. If you’re allergic to attorneys as some people are, then keep copies either digitally or in a lock-box somewhere. You don’t know how valuable these documents are to your company until you need them and you don’t know where they are kept.