What’s A Company Record Book Anyway?
By Vela Wood
When a new company is formed, the founders hear a lot of, “Put that in your corporate 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’s lifecycle: when there is a member/shareholder/partner dispute, or when you’re selling the company and the buyer needs the docs for due diligence. Neither of these instances is one where missing records are a good thing.
Here are the docs that we recommend our clients put into a company record book (or insert when we help put it together for them):
- Certificate of Formation
- Organizational Meeting Minutes (or Unanimous Written Consent in lieu of)
- Company Agreement/Bylaws/Partnership Agreement
- Shareholder’s Agreement (only for Corps, and not all Corps need this to start
- Interest/Share certificates
- Employee Identification Number form (also known as an SS-4)
- Assumed Name certificates (if any)
- Any bank account information
- Napkins with ownership interests scrawled out on them
- Company Resolutions
- 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. (While it’s top of mind – use blue ink to sign originals, that way you can tell if something is photocopied.) If you’re allergic to attorneys, as some people are, then keep copies either digitally or in a lockbox somewhere. Again, you usually don’t know how valuable these docs are until you really, really need them but can’t find them.