It is a simple rule that it takes a lot of documents to run an organization. Governing documents, transaction documents, property documents, tax documents, and many more. What happens when these documents start to pile up? How long should an organization hold on to these documents and what should they do with them when they no longer need them? It is questions like these that make it a best practice for all organizations to adopt a document retention policy.
So, what specifically is a document retention policy, why is it necessary, and how do you draft one for your organization?
What is a document retention policy?
A document retention policy is a policy adopted by an organization’s governing body that outlines how types of documents will be stored, how long they will be stored for, and how they will be destroyed once they are no longer necessary to store.
Why is this policy necessary?
A document retention policy provides consistency and protection to an organization’s staff and leaders, providing them key guidance in how to handle important documents. Should the wrong document be discarded by accident or prematurely, the organization could be open to significant liability. A document retention policy is designed to help an organization, its governing body, and its staff not let that happen.
How do you draft one?
Primarily, a document retention policy should explain the time periods for how long certain documents should be retained. This can be done through the use of a table or readable listing of the types of documents. The retention period should adhere to state and federal guidelines. Additionally, the policy should make it clear that if there is the likelihood of litigation then all relevant documents should be retained indefinitely until litigation is no longer an issue. As a note, there are many documents such as governing documents, tax returns, and audit reports that should be kept permanently.
A document retention policy should also describe in detail how documents are stored to ensure their security. This should include specific instructions for digital documents and physical documents.
Finally, a document retention policy should describe how documents are destroyed once their retention period has expired. This provision should detail specific destruction methods that ensure the security of the information contained in the documents.
If you need help in preparing a document retention policy for your organization, please feel free to call The Apex Law Group PLLC. We would be happy to help!
The above article is for general information purposes only and should not be relied upon as specific legal advice. This article, or contacting Apex, does not in any way form an attorney-client relationship. If you have any questions or would like to learn more, please contact Jacob Ferrari at firstname.lastname@example.org.