question.jpgIn Business Law

What records should I keep regarding my business financing?

An important part of running your own business obviously includes maintaining proper records. One of the most important categories of records you need to maintain are financial records, and you should certainly keep records regarding how your business has been financed. Where you receive money from friends or family, whether as a gift, investment or loan, you should have some written and signed document detailing how much money you were given and whether it was given as a gift, investment or loan (and if it was given as an investment or loan, the document should also include the other relevant details, such as the provisions for profit-sharing or repayment).

Where you take out a loan, particularly when that loan is secured by property, you will want to have a written promissory note. As banks and other commercial institutions generally require/insist on this, it will only be an issue when you are taking a more informal loan. When you have investors, you need to be sure to comply with any state and federal securities laws, if they apply. You should also have written agreements with your investors, outlining the relevant investment terms (how much money is being invested, what percentage ownership in the company they are getting, how much of the business profits they are entitled to, etc.).