Business Records: Types, Examples and How to Search

A few decades ago, businesses were awash in paperwork. There were many cabinets full of files in every office and clerks who managed volumes of letters, invoices, and orders. Now, records are more likely to be digital, which lessens the burden on staff and ends the era of stuffed filing cabinets with company information. Yet it’s still important to decide which records should be kept and how long to keep them.

What Are Business Records and Why Are They Important? 

Business records are the backbone of any successful organization. They're a documented history of your company's activities including financial statements, legal contracts, customer data, inventory logs, and human resources files.

Business records can be valuable, such as customer orders, customer lists, and revenue projections. Other documents are required to be retained for tax and compliance reasons. Knowing which records to retain and how long to store them is crucial to operating a successful business.

Types of Business Records

Types of business records fall into similar categories regardless of the type of business:

Business Licenses and Permits

These are federal- and state-generated documents that show a business is registered, inspected regularly, and/or principles are compliant with state licensure regulations. The records can be anything from proof that a bar has paid its annual dues to ASCAP- the organization that facilitates payment to performers to hazmat training certificates that show employees at an autobody shop are up to date on handling materials. Of course, restaurants and facilities that handle food are required to keep business records documenting food sale permits, staff training, pest control, and health department inspections. Ask at city hall what business records are required for a specific type of establishment in order to begin research.

Property Documentation

Businesses that use combustible materials or biohazards are often required to disclose certain features to public safety officials, including the location of materials, a blueprint of the building, and containment plans. Local fire officials may dictate how long to keep business records of this sort.

Insurance Documentation

Almost all businesses need some sort of insurance, such as worker’s compensation. Certificates of insurance may be displayed in public areas, and those documents often contain company information, like the name of the responsible person. Examples of business records include transportation companies that must maintain records of insurance for drivers and vehicles. This is similar to amusement parks and other publicly accessible attractions, which like restaurants, are required to show proof of insurance and safety inspections. 

Strategic Partnerships Records

When two businesses collaborate on a product, service, or event, it’s key to memorialize roles in writing. Yet, even partners may not share much company information. That way, if anything goes wrong, there is a record of responsibility.

How to Search for Business Records

It’s challenging to do business records search on private companies as they are not required to disclose much company information beyond the business ownership and permits and certificates required by state and federal officials. Public businesses have different obligations to stockholders that require making some records public.

Online Resources

The Securities and Exchange Commission (SEC) requires that publicly traded companies register and regularly submit paperwork that can be researched online through a business records search. In addition, companies that have a fiduciary responsibility for banking, securities (like stocks) sales, providing investment information, or that operate in 15 or more states must submit to some SEC requirements. According to SEC rules, business records in accounting must be retained for three years. Documents available may be limited to required forms that list company officers and a small amount of financial disclosures. If available, stockholder reports can reveal more information. The Library of Congress offers a guide to this of business records search .

Secretary of State offices may provide access to online records of privately held companies in a business database. This company information shows when a business was created (in that state) and any officers listed. Find the directory on the Secretary of State's website.

State boards of licensure that require bonds for tradesmen and certificates of professional standards for different industries, from hairdressing to plumbing, may offer online access to a database of professionals licensed to practice in that state. Other information you may find in such database include the training program or apprenticeship completed, the number of years of experience, and whether any complaints or lawsuits have been lodged against them.

In-Person Searches

If a company has been involved in litigation, whether a class-action lawsuit regarding a product, an interstate commerce case or sue for damages by a customer, company records may be held in courthouse archives. These are generally public records unless the judge allows a gag order to protect witness identities or proprietary information. Doing a business record search for this information requires requesting case files from the court clerk’s office and sifting through them for the desired information.

The Library of Congress keeps a wide range of business information and directories. This is searchable in person at their Washington, D.C. location. In addition, each state maintains an archive of records. You can find more information about your state’s archive, including examples of business records and days and times when records are open to the public, on the Directory of State Archives.

How Long to Keep Business Records?

The rule of thumb for keeping business records (from the IRS) is to maintain any financial records for a minimum of 7 years. Human resources records should be kept for about four years. Business licenses and permits are only kept until renewed as the state records show how when the business opened. Check individual state laws to determine how long to keep state-mandated business records such as certificates of inspection, insurance, worker’s compensation, and compliance documents.

Conclusion

Principals and officers of businesses are obligated to keep up-to-date and accurate records for many purposes. An office manager at a small company should be aware of documentation requirements for insurance, banking, and certification purposes, as well as knowing how long to retain records for legal reasons. Companies with lax recordkeeping are likely to fall behind the competition because their records cannot be used to project future needs or to grasp income vs debits before the situation is dire.

Large companies that do business in multiple states or internationally may benefit from laws in some states that allow them to shield their records from scrutiny. Many take advantage of this opportunity to “offshore” their headquarters and perhaps use it as a strategic advantage so competitors are unable to examine any available records.

FAQs

Why are Accurate Accounting Records Important to a Business?

Financial records are among the most important documents that a business can retain. These show accounts received, accounts payable, and any funds spent on supplies, equipment, salaries, rent, advertising, professional licenses, insurance, and other expenses. These records will also alert the administrator about business licenses and permits that need to be renewed. Using spreadsheets, a business can analyze its accounting records to determine financial health, such as if changes are necessary, including hiring more people in the warehouse to fulfill orders, or whether upgrading equipment is financially feasible. Good accounting records, combined with sound decision-making, can propel an efficient business to a higher level of profitability.

If a business seeks investors or wants to “go public” and sell shares, accounting records are crucial. These will be used to sell the opportunity to potential lenders or stockholders. Good records are the backbone of future plans.

Can I Search for Business Records for International Companies?

Companies doing business in the United States are obligated to disclose some publicly available information, while others disguise their leadership through shell companies and offshore incorporations. Businesses (both U.S. and international) headquartered in certain places may do so to shield themselves from disclosure requirements. These locations include:

• US states like Nevada, Delaware, South Dakota, New Mexico, and Wyoming
• The island nation of Nevis
• The British Virgin Islands
• Belize
• Hong Kong
• Panama
• Bahamas

Information on international companies is available through the Library of Congress, including regional directories, information on manufacturers, and “Who Owns Whom” directories..

Are There Legal Consequences for Mishandling Business Records?

Mishandling records is different from misrepresentation or fraud. If a company fails to renew its insurance certificate, it will probably be reprimanded or even fined a small amount. However, if a business intentionally and methodically falsifies its business records, it can be prosecuted and potentially lose the right to do business in a particular state.

There are many requirements for business records, such as:

• Data safety requirements that pertain to customer information collection
• Accurate documentation for tax purposes
• Bookkeeping records to support loan applications