COMMERCIAL LAWYERS UNDERSTAND THE IMPORTANCE OF RECORD KEEPING
As commercial lawyers we understand that in this electronic age it is tempting and we are often encouraged not to print documents. However it is often a good idea to have a printed copy of some records, as well as an electronic copy.
Good record keeping may sound rather Dickensian but here are a few pointers to make things easier for you as the years roll on, people move on or retire and memories fade. Nobody may remember what happened to that beige filing cabinet in the corner outside Jim’s old office and sometimes you will need is not the current document.
Insurance policies
Particularly if you shop around for the best insurance deal from time to time do you have a copy of your policies in one spot? This is very important for workers compensation policies where a claim would be handled by the insurer at the time of the injury and not the insurer at the time of the claim.
Asbestos claims, for example, are often made decades after the employee left the company.
Premises
If you operate from leased premises are your leases current and are they easily accessible if a problem arises with the landlord? If a lease has expired it will almost certainly run on month to month which means that either party can terminate it on a months’ notice. Clearly a lot of business interruption and expense may arise if your landlord gives you a months’ notice to move out.
If your lease is current but has an option to renew or to purchase the site have you diarised the first and last date to exercise any option to renew or purchase? Dates are critical in these circumstances and valuable rights will be lost if a deadline is missed or if a notice is not served in accordance with any requirements set out in the lease.
Even if you own your premises do you know where the title deed is? If you have a mortgage the bank will have it. Knowing where to locate the title deed, any occupation certificate, survey report or development consent will greatly assist if the premises are being sold or mortgaged.
Personal guarantees
Sometimes resistance is futile and a supplier or other creditor holds a personal guarantee. Do you have a list or ideally a copy of all personal guarantees you have given on behalf of the business?
If a personal guarantee is called on the first thing a lawyer will want to check is the validly of the guarantee and if only for your peace of mind it is good to have them all in one spot.
If the business is being sold the buyer may agree to replace them or to indemnify you against liability but most buyers will want details before they agree to anything.
Share register
Is your share register up to date and are all board and shareholder meetings properly minuted? Are all dealings with the shares properly recorded?
The minutes do not have to be extensive but they should clearly set out what was decided. This is particularly relevant if the shares in the company are being sold or if there is a dispute between shareholders or directors.
Make a commitment today to establish a “permanent record file” of “hard copy” documents.
If you would like to speak with one of our specialist commercial lawyers about record keeping or any other commercial law matter, telephone 9635 7966
