Privately Owned Business Update


More Information about how we serve Privately Owned Businesses			Issue 3, September, 2003
Contact Us: Ryan Barker Tag Birge Carrie Wagner Bootcheck Jim Carlberg Gary Chapman Michelle Cooper Lisa McKinney Goldner Norm Hedges Chris Janak Jeff Kirk Kathleen Lee Bob Lowe Matt Macaluso Paul Mannweiler R.J. McConnell John Millspaugh Mark Need Bob Null Mike Schneider Harry Todd Alan Townsend Susan Traynor Richard VanRheenen Brant Wright © 2003 Bose McKinney & Evans LLP Indianapolis Downtown 2700 First Indiana Plaza 135 North Pennsylvania St. Indianapolis, IN 46204 (317) 684-5000 Indianapolis North 600 East 96th St., Suite 500 Indianapolis, IN 46240 Washington, D.C. 700 N. One Lafayette Centre, 1120 20th Street, N.W. Washington, D.C. 20036 www.boselaw.com	Document Retention Policies for Privately Owned Business: Reduce the Clutter, But Do It Wisely by Matt Macaluso with the assistance of Joel Thorp, a 2003 Summer Associate Most privately owned businesses generate an astounding quantity of paper and electronic documents on a regular basis. Some of these documents must be preserved for certain periods of time in connection with tax obligations, regulatory requirements, contractual commitments, insurance claims, and potential legal actions. However, many documents may be destroyed or updated periodically in an effort to reduce storage expense, decrease liability exposure, and improve organization. For these reasons, every privately owned business should determine what documents to retain and for how long. Unfortunately, this is a surprisingly intricate question, for which a simple catch-all answer does not exist. The good news is that a formal document retention policy assists in managing documents in a way that minimizes cost and risk, maximizes efficiency and organization, and ensures compliance with applicable laws and regulations. The primary objective of a document retention policy is to implement meaningful guidelines for the preservation and destruction of various categories of documents. These guidelines should be based upon: Federal, state, and local laws and regulations that may establish record retention obligations Statutes of limitation that restrict the time frame during which the business can be sued for various causes of action, e.g. breach of contract, product liability, malpractice, fraud, etc.; and Practical considerations, such as the likelihood that a document will be needed, the potential of future liability associated with the document, and the expense of preserving the document. Given the fact that there are very few bright line standards for document retention, many businesses are forced to weigh the aforementioned factors and make a judgment call, or take a calculated risk, regarding how long to retain a particular class of documents. Further, specific retention standards depend on the nature of the business. The most conservative document retention policies attempt to discern the maximum retention period that could be required for each class of documents, and then retain documents for the respective maximum periods. In general, (i) accounting and tax documents should be maintained at least six (6) years after the return’s due date, or nearly seven (7) years after the tax year; (ii) personnel files should be maintained at least for three (3) to five (5) years after termination; and (iii) legal documents, such as by-laws, articles of incorporation, partnership agreements, minutes, and contracts and leases that are still in effect, should be retained permanently or until at least a reasonable time after completion, depending upon the specific document. If you would like assistance formulating a document retention policy tailored for your privately owned business, please contact one of our attorneys in our Privately Owned Business Group. Meet Attorneys Who Serve Privately Owned Businesses
	Gary Chapman assists privately owned businesses with estate and business succession planning as well as business transactions. Gary also is the chair of the firm's Agriculture Law Group.	Mike Schneider practices in the areas of mergers and acquisitions, business organizations, corporate finance, recapitalizations and reorganizations, business transactions, securities, tax and business succession planning.	Matt Macaluso handles a variety of business matters for privately owned businesses. He assists all types of businesses, including those in the health and life sciences industries, with corporate transactions.
This Update, a service of Bose McKinney & Evans, provides information on the issues that affect your business. For more information about the materials presented, contact your primary Bose McKinney & Evans attorney, or email us comments. The information in this Update should not be construed as legal advice. To unsubscribe click here and type "unsubscribe" in the subject box.