What to Do with Company Records After Your Business Closes Its Doors

Once your business closes up shop, there are many responsibilities you’ll no longer have to worry about. However, maintaining some of your company’s records remains important whether or not you are open for business.

Though you may not be using these records for day-to-day business tasks anymore, you may still need the data contained in these records in the future. In fact, there are legal reasons why you may need to retain this data even after your business has closed.

Why Maintaining Records Is Important

Did you know that small businesses are much more likely to be audited by the IRS than individuals are? Even if your company is no longer in business, you could still receive some unwanted attention from the IRS if your company was still functioning within the last tax year.

The best way to arm your business against an audit is to keep pristine records of all of your business’s financial transactions. Since audits can still occur after your business has closed its doors, this means maintaining easy access to all of your financial records well after your company has shut down.

The possibility of an IRS audit isn’t the only reason to keep some crucial documents on file. Your records could be the only way to prove your company’s good business practices in the face of inquiries from entities like the Social Security Administration, the Department of Labor, or the Equal Opportunity Commission.

Which Records Should You Keep?

Not sure which documents to keep and which to destroy after your business has closed down? The best rule of thumb is to keep everything for at least seven calendar years.

If you’re unsure which documents you are required to keep even after your business has closed, you can check with a local small business attorney who is familiar with the guidelines of your state.

Documentation requirements can vary greatly from state to state, so it’s important to know exactly how long you’ll need to keep your company’s data on file. In general, some of the most important records to keep are all of your tax returns and the documents that support them.

This means keeping as much local, state, and federal tax data as possible for several years after your business has closed. If you are able, you should keep your employees’ tax-related records on hand as well, including all employee identification numbers, personal information, and documentation of any benefits paid.

Asset records, proof of past insurance, and any other miscellaneous business documents are also important to keep on hand for as long as your state requires. This could include a wide range of documents, such as LLC articles of incorporation, business licenses, and contracts with distributors.

Secure Data Destruction You Can Trust with SEAM

Keeping your company’s documents available for review for several years after your business has shut down is a crucial part of protecting your business. When it’s time to destroy your sensitive data, however, make sure you’re trusting only the best to do so.

Contact SEAM today for safe and secure data destruction in North Dakota and South Dakota.