Keeping Records for your LLC

This may come as a surprise to many LLC members and managers:  Keeping records for your LLC is required under the New York LLC laws.  You have an obligation to keep proper records under §1102 of the New York Limited Liability Company Laws.

What Records MUST be kept in an LLC?

Specifically, under Section 1102 LLC law, you must maintain the following records:

  • if your LLC has managers, a list of the full names of all managers and their mailing addresses;
  • a list of all members and their mailing addresses together with each member’s contribution to the LLC and his or her share of profits and losses;
  • a copy of the articles of organization and all amendments;
  • a copy of the operating agreement;
  • a copy of the LLC’s federal, state, and local income tax returns for the three most recent years;

If you are in charge of managing the LLC books, you are well-advised to adhere to these rules so that nobody can blame you for being negligent in the management of the LLC.

What other Records SHOULD you keep?

You should obviously keep all other filings and communications with New York State authorities, for example, the LLC filing receipt, the affidavits of publication filing receipt, and receipts of biannual statements.

You should keep a record of all minutes created for any meeting of managers or members and any written resolutions.  Certain decisions not in the regular course of business of the LLC require the consent of a majority of the LLC members.  This can be a resolution voted upon in a meeting or a written consent.  In any event, all such resolutions and consents should be kept together in chronological order.

Where do I have to keep the records of the LLC?

The law does not specify where exactly, but it seems prudent to save these records at the location of the principal office of the LLC.   The law also allows you to keep the records in electronic format, as long as you can produce everything in written form in a reasonable time (aka print it).  §1102(d).

Who can demand to see and inspect the Books and Records of the LLC?

Any member of the LLC can demand from the management of the LLC or any member who is in control to see and inspect the LLC’s books and records.

Any member of the LLC has a right to demand access to such records and any financial statements maintained by the limited liability company for the three most recent fiscal years and any other information regarding the limited liability company’s affairs as is just and reasonable.

While I have you thinking about keeping records, it wouldn’t hurt to peruse this IRS publication:  Starting a Business and Keeping Records.

Do I have to have a fancy seal and binder?

When forming an LLC with any service, many will include fancy binders and seals in their offering.  Do you need that?  Absolutely not.   Just keep everything organized in any kind of file folder or in dedicated folders on your network or computer.

 

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