Limited Liability Company Records
After reading our Selecting a Business Structure Series and speaking with your Business Law Attorney, you decided on a Limited Liability structure for your business. You have filed your Certificate of Formation, completed an Operating Agreement, and received your Federal Employer Identification Number (FEIN).
You wonder what you should do with all of this paperwork, what you should keep, and for how long you should keep it.
What Documents Must Be Kept?
Texas law requires that LLCs keep books and records of accounts.
A current record of the name and mailing address of each owner or
member of the filing entity must be kept at the registered office, principal place of business, or at the office of the entity’s transfer agent or registrar.
—See Books and Records for All Filing Entities—Tex. Bus. Org. Code §3.151(a)(1)-(3)
A Limited Liability Company is not required to maintain minutes of the proceedings of its owners, members, or governing authority and committees of the owners or governing authority, except to the extent it is required by its governing documents.
—See Books and Records for All Filing Entities—Tex. Bus. Org. Code §3.151(c)
It is important to note that all of the records may be kept in written paper form, or another form capable of being converted into written paper form within a reasonable time. This means your business can take steps to “go green” by keeping electronic copies of the records.
—See Books and Records for All Filing Entities—Tex. Bus. Org. Code §3.151(b)
Do LLCs Require Additional Documents?
There are additional requirements for Limited Liability Companies. A Limited Liability Company must keep a current list that states the percentage or other interest in the LLC owned by each member and the names of the members of each specified class or group if one or more classes or groups of membership interests are established in or under the certificate of formation or company agreement.
—See Supplemental Records Required for Limited Liability Companies—Tex. Bus. Org. Code §101.501(a)(1)
An LLC must also maintain a copy of its federal, state, and local tax information or income tax returns for each of the six preceding tax years, its certificate of formation, including any amendments to or restatements, a copy of the company agreement (if it is in writing), including any amendments to or restatements, an executed copy of any powers of attorney, and a copy of any document that establishes a group or class of members as provided by the company agreement.
—See Supplemental Records Required for Limited Liability Companies—Tex. Bus. Org. Code §101.501(a)(2)-(6)
Additionally, an LLC (unless a written statement of the following information is stated in its company agreement) must keep a written statement of the amount of a cash contribution and a description and statement of the agreed value of any other contribution made or agreed to be made by each member, the dates any additional contributions are to be made by a member, any event the occurrence of which requires a member to make additional contributions, any event the occurrence of which requires the winding up of the company, and the date each member became a member of the company.
—See Supplemental Records Required for Limited Liability Companies—Tex. Bus. Org. Code §101.501(a)(7)-(b)
Finally, an LLC must keep the street address of its principal office in the United States where the required records are maintained or made available.
—See Supplemental Records Required for Limited Liability Companies—Tex. Bus. Org. Code §101.501(c)
Where Are LLC Records Kept?
All records that Texas law requires to be kept by an LLC must be maintained at its principal place of business. The street address of the LLC’s principal office where the records are maintained must be kept at the LLC’s registered office.
—See Supplemental Records Required for Limited Liability Companies—Tex. Bus. Org. Code §101.501(a) & (c)
Who Has a Right to Examine the Records?
On written request and for a proper purpose, a member of the LLC or an assignee of a membership interest, or a representative of the member or assignee may examine and copy at any reasonable time and at the member’s or assignee’s expense certain LLC records and information.
—See Right to Examine Records and Certain Other Information—§101.502(a)
The member or assignee may examine the required records and other information regarding the business, affairs, and financial condition that is reasonable for the person to examine and copy.
—See Right to Examine Records and Certain Other Information—§101.502(a)
The LLC must provide a free copy of the certificate of formation, including any amendments to or restatements, the company agreement, if in writing, with any amendments to or restatements, and any federal, state, and local tax returns for each of the preceding six years to a member or assignee. The member or assignee must request these documents in writing by sending the request to the LLC’s principal office, or, if different, to the person and address designated in the company agreement.
—See Right to Examine Records and Certain Other Information—§101.502(b)
Be sure to speak with your business law attorney about any questions you may have regarding which records to keep. She can review your records to ensure that you are compliant with the requirements of Texas law.
–Authored by Carrie A. Harris, Esq.,
Matthew Harris Law, PLLC – Business Law Division
1001 Main Street, Suite 200, Lubbock, Texas, 79401-3309
Tel: (806) 702-4852 | Fax: (800) 985-9479