First, kudos to you for watching this video. This means you’re serious about properly maintaining
the LLC. Taking care of a business’s books and records
is not glamorous. I’ve never had a conversation with someone
who is excited about starting a business because they enjoy all the paperwork it requires. There’s no payoff to doing it. It doesn’t increase the value of the business. It doesn’t improve products or services, and
it doesn’t bring in customers. It requires constant work and attention, and
if you’ve never done it before, there’s a significant learning curve. However, mismanagement of books and records
of the LLC can have disastrous consequences. The first thing that should come to mind when
properly managing books and records is being audited by the IRS. Well kept books and records can make the audit
smoother and less intimidating. The next thing that should come to your mind,
is preventing loss from theft or negligence in management. Well-kept books and records can help you identify
inconsistencies in a transaction. It can also help you identify areas of waste. You should also be thinking about business
growth or other changes. At some point, your business may need to have
a valuation. This can happen when a new member wants to
join or when an existing member wants to leave or is no longer available due to death or
disability. Disagreements between Members and Managers
may also arise. Members may demand access to the books and
records. Well-kept records will make it easier to review
the legal requirements for resolving differences, and make it more efficient to provide Members
with access to the records. These are some of the records the LLC will
need to maintain: The original or certified copy of the Certificate
of Formation, file-stamped by the Texas Secretary of State;
The original Company Agreement, and its amendments signed by the Managers;
A complete accounting of the LLC’s business, including full and accurate records of each
transaction; A current list of all Members; including each
Member’s: Full legal name; last known address; capital
contributions; date on which membership became effective; and percentage of ownership;
A current list of all Managers and officers, including their addresses;
Meeting minutes, votes, consents, waivers and all other records made in the course of
LLC management by Members and Managers; Federal, state, and local tax information,
tax returns, and other tax-related documents; Contracts and agreements between the LLC and
Members, Managers, Officers, Employees, Contractors, Vendors, Suppliers, Landlords, Agents, and
any other third party; [and] Deeds, mortgages, and titles to real property. This Planning Guide is designed to help you
prepare for organizing a new LLC. The Planning Guide is made up of 5 parts. Each part has sections. Each section has an instructional video. These instructional videos start by explaining
the underlying legal concepts for that section. Each video also includes a demonstration for
how to fill out that section of the planning guide. In each demonstration, I’ll show you how I
would use the guide to plan an LLC called “Fake LLC”.