California enacted its first LLC statute in 1994. The initial statute was referred to as the Beverly-Killea Limited Liability Company Act. After several revisions the initial statute was replaced effective January 1, 2014 with the California Revised Uniform Limited Liability Company Act (RULLCA). The RULLC Act is found at Cal. Corp. Code Sec 17701.01 et seq.

The record keeping requirements of the RULLC Act, found at Cal. Corp. Code Sec 17701.13 (d), specifically lists various documents which must be kept. It also requires that all documents be kept that deal with certain identified subject matters. Additionally any document containing information that the LLC perceives to be relevant to a reasonable inquiry of a member should be kept.

Best Practices for Record Keeping for a California LLC

The following records should be kept by any California LLC.

Formation and Organization Documents

1. A copy of the Articles of Organization and all amendments to it. (17701.13 (d) (3) "A copy of the articles of organization and all amendments thereto, together with any powers of attorney pursuant to which the articles of organization or any amendments thereto were executed."
2. A copy of all written Operating Agreements ever used. (17701.13 (d) (5) "A copy of the limited liability company's operating agreement, if in writing, and any amendments thereto, together with any powers of attorney pursuant to which any written operating agreement or any amendments thereto were executed."

Correspondence with the State

1. Any document filed with the State concerning the LLC;
2. Any document received from the State concerning the LLC.

Financial Documents

1. A copy of all federal, state, and local income tax returns for each year; (17701.13 (d) (4) "Copies of the limited liability company's federal, state, and local income tax or information returns and reports, if any, for the six most recent fiscal years.")
2. A copy of any financial statements. (17701.13 (d) (6) "Copies of the financial statement of the limited liability company, if any, for the six most recent fiscal years.")

Documents Related to the Internal Operation of the LLC

1. A copy of the minutes, if any, of each meeting of members and of any written consents obtained from members; (17701.13 (d) (7) "The books and records of the limited liability company as they relate to the internal affairs of the limited liability company for at least the current and past four fiscal years.")
2. Any document which discusses the amount of capital contributions of each member in terms of cash or agreed value of other property or services contributed; (17701.13 (d) (7))
3. Any document which discusses the details of events, times, or other agreements made for further contributions to be made from members, if any; (17701.13 (d) (7))
4. Any document which discusses the share of profits and losses due each member;
5. Any document which discusses any right of a member to receive distributions of funds;
6. Any document which discusses any right of a manager to make distributions of funds to a member;
7. Any document which discusses each member's respective voting rights;
8. Any document which discusses the details of events that would cause the LLC to be dissolved and its affairs wound up, if any.

Records of Members and Managers

1. A current list of the full names and last known address of all past and present members. (17701.13 (d) (1) "A current list of the full name and last known business or residence address of each member and of each holder of a transferable interest in the limited liability company set forth in alphabetical order, together with the contribution and the share in profits and losses of each member and holder of a transferable interest.")
2. A current list of the full names and last known addresses of all past and present managers. (17701.13 (d) (2) "If the limited liability company is a manager-managed limited liability company, a current list of the full name and business or residence address of each manager.")

Other LLC Business-Related Information

Under the RULLC Act, the LLC should maintain any record which contains information about LLC business which relates to "the internal affairs of the limited liability company for at least the current and past four fiscal years." 17701.13 (d) (7)

Location of Records

The above documents and records should be available at the office designated by the LLC with the State.

Form of Records

The documents and records may be maintained either in hard copy or electronically, as long as the electronic version can be printed within a reasonable period of time. (17701.13 (d) "Each limited liability company shall maintain in writing or in any other form capable of being converted into clearly legible tangible form at the office referred to in subdivision (a)")

Other Records

The above records are just the documents and records that are required to be kept as to the form of business. Many other records, for example records required to prepare tax returns, records required to be kept on employees, etc., are also required to be kept by an LLC, just as they are required for businesses operating in other forms.

The After Incorporation Tools

After Incorporation's tools are specifically designed to aid companies to comply with these requirements. Using our tools, your records are not only organized properly, but they can easily be made available to your Members and others required to be given access under these laws. You will also find the forms and templates you need to create the documentation to meet these requirements.