An Organized LLC
If you have read my About Us page you know that I am an entrepreneur at heart!
When I first started my own business, I quickly realized how important it was to keep my essential documents organized. There are a myriad of documents, accounts, and pieces of information that are needed to make sure your business is running smoothly. When all of this information is assembled in one place, maintaining your records over time is a really simple process.
And, as it turns out, I’m finding that many of my business clients ask for help in pulling together these essential documents in a way that is accessible and makes sense.
For these clients, I always recommend creating some sort of binder to keep their information organized. You can maintain this binder however you like – 3-ring, accordion, folder, whatever! However, regardless of how you organize your paper version, you must also have a DIGITAL version!
So what do you need in your LLC Binder? Let’s break it down!
Throughout this post, I refer to an LLC-Business Binder — however please note that this checklist can be used for all types of businesses!
What’s in Your LLC Binder?
Here is the information I recommend that you keep in your binder.
Formation Documents
Whenever you form your own business, there are several documents you will need to create. Some of these you will need to file with the state, and some you will need for your personal record, but all should be in your LLC Binder.
Articles of Organization – This is the document your receive once you file your LLC with the state and pay the fee. You must keep a copy of this!! Your LLC does not become effective until the day it was filed. This paperwork will have the date it was filed on.
Operating agreement - This document is not required and not every business one, however, this outlines how to solve disputes. Even in the best relationships, you will disagree on certain things — so it's best to have a specific way to resolve that dispute figured out in advance while you're still getting along. Some examples of what an operating agreement outlines: how are you going to give notice? How do people vote? How will you solve disputes? It also puts restrictions on your ability to sell or ransfer your ownership interests.
Business Plan - You could have a really robust business plan thats 25 pages or, you could have a single paper with notes. It doesn't matter what your business plan looks like, but it should be included in your binder. This is the guiding document of your business.
Membership Information
Contact information for all members and owners of the LLC is extremely important.
You might be thinking — well my husband and I own this business together and I already know his contact info… so why would I need to keep it in our binder?
Keep in mind, this information isn’t in here for you. It’s in here in case something happens to you, or if you become incapacitated. If someone else needs to go through your LLC information, do they have what they need? For EACH member, you should include:
Member Name
Phone
Email
Address
Membership Interest Information
For example: does each member have equally 20% interest? Does one member have more interest? Do any members have non-voting interest — ie, they are financially invested but do not make decisions?
Transfer of Interest
Your operating agreement should have this process outlined, however, if at any point there needs to be a transfer of interest you should document how that process occurred.
For example: if one owner passes away and the business automatically passes to his wife, you want to make a record of when this interest transferred, if it required approval and when that approval took place.
Contracts and Leases
Do you own any property in the business name? Have you purchased vehicles in the business name? Are you leasing office space?
What about your suppliers? Do you sell goods and have a particular supplier where you purchase your inventory?
All of these contracts and contact information should be included.
Minutes and Consents
This is where you want to record if the business has made any major decisions. Have you invested capital in a major purchase? Even if you are a solo business owner, it’s important to note the decision that you made, why you made it, and when it was made.
Make sure to also include any profit distribution authorizations. If you are distributing profit instead of just taking a payroll, or if its not a straight LLC pass through, then you will want to record every time these distributions are made.
Key Contacts
This section is important for contingency planning. What if something were to happen to you and someone else needed to step in. It would be helpful for them to know contact information for your:
Insurance agent
Attorney
Accountant
Primary vendors
Banker
Any other person that you interact with on a regular basis
Another contact you should list here is the person most knowledgeable on how your business is run.
Consider this…
In your operating agreement you typically name someone that will take over running your business. Let’s say your business gets passed to your spouse. Does your spouse know the day-in and day-out details of running your business? In this case, you might want to pull in the head of operations to help your wife continue to run business as usual. Whomever this person is, you will want their contact information listed in your binder.
Business Succession Plan
I highly recommend that all business owners establish a business succession plan. This is where they work through a lot of these what-if scenarios and decisions. It is the only way to make sure that your business is taken care of in the event that something should happen to you. This plan is not required to run a business, but highly encouraged.
Finance and Insurance
This section is pretty self explanatory. Here are some examples of what you should include:
Insurance policies
Bank accounts
Credit card statements
Loan documents
Promissory notes
Tax returns
Claims made against, or by, your business
Sum It Up…
Running a small business is not for the faint of heart! It takes a lot of hard work and meticulous record keeping. Make sure that you have all of your important documents organized and easily accessible.
Keeping a binder handy is useful if you need to refer to a specific piece of business information — or, in more extreme cases, if someone needs to step in and assist you, they will have the necessary information they need.
Want to get organized?
Download our LLC Binder Checklist PDF! It has all of this information in an easy checklist format!