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How long must nonprofit retain financial book and records?

Your Legal Questions Answered

How long must nonprofit retain financial book and records?

How long is a nonprofit required to retain General Ledgers and other original books of financial records? If the guidelines state "in perpetuity," what constitutes perpetuity when an organization is 100 years old?

Although there are well over 1,000 federal and state statutes and rules that govern record retention, record retention policies are always problematic. There are no absolute answers. Some state nonprofit corporation statutes establish a specific number of years for retention of corporate and financial records, but most merely state that they should be available for inspection.

We generally recommend that basic corporate documents, such as articles of incorporation and amendments, member and directors meeting minutes, corporate resolutions, and annual financial reports, be kept as long as the entity continues to function.

Since it is not practical to retain all documents in perpetuity, however, we generally recommend that, unless you want to save them forever as historical archives, they should be held a few years longer than the statute of limitations on any possible dispute that might involve them.

Monday, January 1, 2007

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