12 Types of Business Documents Every Business Needs
Documents and business are synonymous with one another. You need documents to start, operate, and expand a business.
In a nutshell, there’s no way of getting around them. In fact, you need a system in place to properly maintain all of the business documents you accumulate over the years.
If you’re starting a business and are wondering what types of business documents your company will need, then this guide is for you.
Let’s do a quick review.
1. A Documentation of Bylaws
Be prepared to delve into all sorts of legal documents during your years as a business owner. One of these business documents you’ll need to have on hand is a written record of bylaws.
There’s no need to file this with your state, however, it is necessary to have it on hand. What are bylaws?
These are regulations a company establishes to govern itself. Certain states don’t require businesses to have bylaws, but it’s still a good practice to create them. It will provide your company with guidelines for handling certain issues.
This document details your company’s structure, governance problems, and individual roles. In the event your company ends up in a dispute, your directors will know what to do. It’ll also dictate whether a board meeting is required to approve a decision beforehand.
2. Operating Agreement (LLC)
If you’re a limited liability corporation (LLC), then it’s a good idea to have an operating agreement on hand. This is especially necessary when there are several members.
The purpose of this business document is to outline functional and financial decisions. For instance, if there are multiple partners, it’ll detail how business decisions are to be handled and how the distribution of profits and losses will occur.
It’s good to cover all corners, such as what will happen if one of the partners decides to leave the business.
All members of the company must sign this document and it becomes a legally-binding contract. You can do this conveniently using an online electronic signature tool like Xodo Sign.
First, have a sit down with your partners to determine what to include in the operating agreement document.
3. Non-Disclosure Agreement
Throughout your business career, you’re going to work with contractors, freelancers, employees, and business partners. And during these relationships, you’re going to have to share information that’s critical to your company.
It’s important to safeguard your business by requiring these individuals to sign a non-disclosure agreement (NDA).
Some of the critical data you may share includes:
- Client lists
- Project details
- Financial records
- Pricing plans
- Design ideas
- And so on
Any information that your competitors would love to get their hands on should be kept confidential. And one way to ensure this is by writing up an NDA and using that for each new hire or business collaboration.
4. Minutes for Your Business Meetings
The majority of the states require corporations to keep records of minutes, but only for major meetings. As for the formal meetings, all you need is an official account going over what was discussed and what decisions were made (or actions taken).
The point of meeting minutes is that they can help with settling disputes regarding what happened during a particular meeting. Make sure to detail everything you can in the meeting minutes, including a list of attendees and votes.
5. Employment Agreement
Each time you hire a new employee, you need to have them sign an employment agreement. This covers the company’s expectations of the employee and the obligations of the employer.
This document is also for dispute resolution in the event the company or employee attempts to obscure the expectations of their working relationship.
The employment agreement can also help retain new hires by including penalties for quitting too soon or breaking the contract.
You can also set up a time limit for when an employee is allowed to work for a competitor, such as two years after leaving your company. This helps to ensure your business secrets aren’t shared with your competition.
Be sure to allow an employment attorney to review the document before using it.
6. Your Business Plan
This is a business document you need to start a business, obtain loans and grants, and set up business partnerships. It’s what outlines the goals of the company and a means to reach them.
Thorough research is required to ensure you’re on your A-game before you open up shop. This includes analyzing your competitors, target customers, and how you plan to stand out in your market.
Your business plan doesn’t have to be long either. It can be one page or as many as 200 pages. It all depends on how much information you have to showcase the roadmap to the future success of your business.
7. Business Reports
It’s good to know how well your business is doing. With business reports, you can learn all sorts of things about your company, its teams, and employees.
They’re longer than your typical letter and consist of different forms of data. For instance, it may show sales figures, marketing plans, safety compliance, feasibility studies, images, graphs, case studies, and more.
Business reports help you and your management teams to make more informed business decisions. These may also come in handy if you’re looking to bring aboard new investors. You can easily create a template to make it easier to write up reports on a whim.
8. Financial Documents
Knowing whether you’re within budget or spiraling towards debt is key to determining your success. Your financial documents will identify whether you’ve overspent or stayed within your budget.
These records can also assist you in the process of writing up budget proposals and filing tax returns. Some examples of financial documentation include:
- Income statements
- Balance sheets
- Bank statements
- Payroll reports
- Receipt records
With a financial report, you should be able to identify whether a department is productive or not. Normally, financial reports are created on an annual basis to give you a broad review of successes and failures during that year.
9. Transactional Documents
Keeping track of the money that goes in and out of your business is key. Like financial documents, transactional documents help you to organize finances.
The transactions you want to manage include receipts, invoices, order forms, and transmittal pages.
You can write up a report based on the transactional documents you collect. This will help to organize everything into one neat document instead of an onslaught of paperwork.
Some businesses even go as far as to hire a lawyer to draft the document.
10. Business Creation Documents
You never know when you’ll have to prove your business’s legitimacy. Thankfully, this is as simple as showing three key documents.
One is your articles of incorporation or organization. This is when your company registers as a corporation, such as an LLC, sole proprietor, or another type of entity.
In these documents, it may include meeting minutes, names of initial officers, and certificates of shareholders.
Then there’s the document for your employer identification number supplied by the IRS. This is the number you use to help separate your personal and business finances. You can also use it to open up a separate bank account, credit cards, and loans.
It’s simple to apply for an EIN online. Once you’re approved and receive your EIN, keep it in your business records.
Last, you need to keep your permits and state tax number documents on hand. There are different requirements based on the state you live in and the industry you’re in.
You can visit your local state franchise tax board or controller’s office website to learn more about the guidelines for tax ID numbers, permits, and franchise tax registration.
All of these documents are required for establishing your company and should be on record until you close up shop.
11. Compliance and Regulatory Documents
Your state, business industry, and how you operate will determine which documents you must keep to meet compliance and regulatory guidelines.
For example, if you have employees, then you’ll have to keep payroll data, tax ID verification forms, and tax documents on hand for a certain number of years.
Any documents regarding compliance with security information training and diversity training will have to be signed by employees and kept on file by your HR department.
12. Business Insurance Documents
Hopefully, you decided to invest in business insurance to prevent losing your company in the event of a disaster. It’s important to keep documentation on file of your insurance, including the policy number and coverage details.
You’ll find some insurers don’t offer coverage for floods and earthquakes, yet they’ll cover vandalism, theft, fires, and wind damage.
In the event you need all types of coverage, then you’ll need to buy separate insurance for floods and earthquakes.
Securing Your Business Documents
This isn’t an all-conclusive list of business documents you should have available. You’ll find there are some documents unique to your business that require record keeping.
It’s good to organize your files just in case you end up needing proof during a dispute.
With a digital document management system, you can easily organize all of your documents. With Xodo Sign, you can send, sign, and receive documents 100% online.
Managing business documents on the cloud is much simpler than dealing with mounds of paperwork.
If you’re a pro at managing all of your business documents, let us know in the comments what systems and tools you use!