In the United States, corporate records are those records that a corporation must maintain in order to demonstrate that it is operating in accordance with the Internal Revenue Service and the laws of the state in which the corporation is incorporated (formed as a corporate business entity). In here to guide you to understand what is corporate record book and what importance is it?
What Is the Function of a Corporate Records Book?
Corporate records “books” are kept by some businesses, and these books contain all of the necessary paperwork. In other circumstances, the business records are stored either online or in a file cabinet on site. If your company is audited by the Internal Revenue Service, all of your records should be in one location and easily accessible.
Additionally, you can store your company documents “in the cloud,” but bear in mind that these records may contain confidential information and proprietary processes, so make certain that your server is protected. Susan Ward, Small Business-Canada Expert, has written a fantastic essay about document management that you could find useful in this situation.
What Is the Importance of Corporate Records?
Corporate records are required to demonstrate that the corporation is operating in accordance with the Internal Revenue Service’s requirements, to demonstrate that the corporation is a separate legal entity, and to ensure that the corporation’s liability shield is maintained.
What is the process by which they are created?
The board of directors of your corporation is responsible for maintaining corporate documents. The board of directors is responsible for the creation of papers such as your corporation’s articles of incorporation and annual report. During board meetings, the board also prepares and edits papers such as motions and minutes, among other things.
The corporate secretary is typically tasked with the responsibility of maintaining all of the company’s records. Without a doubt, all records must be signed, and any acts made must be accompanied by supporting paperwork. If the corporation holds stock, the corporate secretary (who normally works in the office of this individual) is in charge of keeping track of the company’s stock ownership data. In addition, the corporate secretary takes attendance at each board meeting, recording which board members are present and which board members are missing.
Resolutions of the Board of Directors.
In general, corporate boards of directors adopt overarching policies and resolutions (decisions), but they do not become engaged in the day-to-day operations of the company. The adoption of resolutions is one of the most significant functions of a business board of directors. In the board of directors, resolutions are documents that document board decisions. Resolutions can be passed by corporations on a variety of topics, including:
- Records of the corporation’s key transactions are kept on file.
- Contracts are approved or rejected.
- Real estate transaction records include records of the sale or purchase of real estate (land and buildings).
- Recruitment or dismissal of a significant number of employees.
- Introducing a new product or service into a new market or location.
All of these judgments, as well as others, must be documented.
What further records should be included in the collection.
Incorporated under your Articles of Incorporation and any amendments to this document These articles have been filed with your state, but you will still require a copy of the original as well as any modifications.
Bylaws of the corporation.
The bylaws of a corporation serve as guiding principles for the work of the board of directors of the corporation. Included in the bylaws are information on corporate officer responsibilities, the annual meeting schedule, and how the board determines policy and votes.
- Annual meeting minutes, as well as the minutes of all shareholder and director meetings, including the annual meeting
- Annual reports are required.
- A stock register is used to keep track of stock transactions as well as the ownership of shares.
- Business and tax resolutions for corporations.
- Resolutions in the hiring and appointment processes.
- Conflict of Interest Resolutions for the Director.
- Loans to and from the corporation are authorized by resolutions.
- Employee perks and retirement programs are addressed in these resolutions.
- Stock dividend resolutions are a type of resolution.
Creating Your Board of Directors and Maintaining Records
As you are forming your business, you will need to verify with your state to ensure that you are adhering to all applicable laws and regulations regarding the organization and operation of your corporation. Every state has its own set of rules and regulations governing companies. More information can be obtained from your state’s secretary of state or from your legal representative.