Hi Reader!

Every business should have a central legal file where its important legal documents are stored.

This might seem like a hassle, unnecessary, or even pointless. However, having a centralized file of legal paperwork can save you time and effort when you're asked for important documents like your sales tax certificate, EIN number, or W-9.

Why should you take the time to do this dreary and mundane administrative task?

Because keeping accurate and up-to-date legal records will:

• help you spot any holes in your legal compliance
• allow you to quickly and efficiently retrieve records when they are requested
• help safeguard your personal assets
• make tax time easier
• prove you are treating your business like a business

But what you keep in that folder depends on which legal type your business is.

All businesses should have:

• Federal Employee Identification Number
• Property List
• Tax Returns
• Business Books

If you are a corporation, you should also have:

• Articles of Incorporation
• Bylaws
• Board of Directors Minutes + Consents
• Shareholder Minutes
• Shareholder’s List

If you are an LLC, you should also have:

• Articles of Organization
• Operating Agreement
• Members List
• Members Meetings Minutes + Consents

If you are a partnership, you should also have:

• Partnership Agreement

(Want a detailed description of what each of these are? Check out this Essential Legal Documents blog post.)

Here are my five best practice tips for organizing your legal central file:

• Keep physical files: If you get a physical copy (especially if it’s got some sort of filing stamp), you might need to present this copy in the future. So make sure to store it in a safe place.
• Keep one digital folder: Create a dedicated folder (ideally on a cloud storage platform or one that’s regularly backed up) to store all your important legal documents. Name it something like “Important Legal Documents” or "Critical Legal Records" for easy identification.
• Categorize with subfolders: If you have a lot of documents, then it might be helpful to group them based on categories. For example, group all of your LLC documents together. Or all of your state sales tax certificates together. This makes it easier to locate specific documents when you need them.
• Use a naming convention: Use consistent and descriptive file names for each document. For example, when I forward my clients a copy of their signed LLC Operating Agreement, I title it “LLC Name Operating Agreement - signed”.
• Regularly update and review: Set aside time once or twice a year to review and update your legal records. Remove outdated or irrelevant documents and ensure all necessary records are included.

👉 Your assignment: Using the list above find, scan, save, or file a copy of each of the documents on the list and put them in your newly created Legal Central File.

I'll be sitting at my computer until about 9:30 AM Pacific and I'd love to know if you run into any roadblocks in completing this week's task. (And if you are reading this after then, please reply! I'll get back to you ASAP.)

Chat soon,

❤️ Easy to understand legal resources should be available to every creative, regardless of their financial situation. If one of my resources has helped you and you would like to say “thank you”, you can make a contribution here. ❤️