Clearing out your documents for the new year
The holiday period is the perfect time to declutter your documents but avoid throwing out those essentials you need to keep.
Since different rules apply to different documents, the length of time a business needs to retain them depends on what the documents are. Holding on to your documents for seven years is a good starting point for most businesses.
The essential rules are as follows:
Financial records must be kept for seven years after the transactions have been completed.
Tax records must be kept for a minimum of five years.
Employment records must be kept for seven years after termination.
Documentation of assets must be kept for five years after they are sold.
There are circumstances where you must keep your documents for more than seven years or even indefinitely. Documents relating to intellectual property rights like trademarks and copyright must be retained for as long as the rights to the intellectual property exist. Trust deeds must be kept indefinitely. Documents relating to legal action must be held for the period of litigation or permanently.
When re-organising your documents also consider that:
Essential documents must be kept in a safe and secure location to avoid any risk of losing them to fire or theft.
Confidentiality and privacy obligations may exist. Consider your storage location, potential access to the documents and the agreement with any third party storage provider.