Orderly retention of business records: the Civil Code checklist

01

What the Civil Code requires about record retention

Anyone carrying on a commercial activity must keep the daybook and the inventory book, along with any other accounting records required by the nature and size of the business, and must keep in order, for each transaction, the originals of letters, telegrams and invoices received, together with copies of those sent.

Accounting records, invoices, letters and telegrams must be retained for ten years from the date of the last entry.

02

Who is required and what exceptions exist

The obligation to keep the daybook, the inventory book and other accounting records applies to those carrying on a commercial activity; the provisions do not apply to small entrepreneurs. The daybook must show, day by day, the operations of the business, while the inventory must be prepared at the start of the activity and then every year, indicating and valuing assets and liabilities.

03

The operational flow for organizing retention

Steps

1. Progressively number the accounting books before use and apply stamping or certification where required by special laws.
2. Revise the daybook day by day and prepare the inventory at the start of the activity and then annually.
3. Sign the inventory within three months of the deadline for the income tax return.
4. Retain accounting records, invoices, letters and telegrams received and sent for ten years from the last entry.
5. If electronic record-keeping is adopted, apply time-stamping and digital signature at least once a year.

04

A hypothetical case: document organization in a limited liability company

Suppose a limited liability company that, in addition to the records required under Article 2214, keeps the book of shareholders' resolutions, the book of directors' resolutions and the book of the board of auditors' resolutions, as required for limited liability companies. In the book of shareholders' resolutions, the minutes of meetings are recorded without delay, even if drawn up as a public deed, along with the shareholders' decisions taken according to the procedures provided by law; the related documentation is kept by the company.

05

Decision checklist before year-end closing

• The daybook is updated day by day with the operations of the business.
• The annual inventory has been prepared and signed within the three-month deadline.
• The books are progressively numbered and, where required, stamped before use.
• Invoices, letters and telegrams received and sent are retained for ten years from the last entry.
• If electronic record-keeping is used, time-stamping and digital signature have been applied at least once a year.

06

Setting up software support for document retention

A business may choose to configure, with its software partner, traceability linking each accounting entry to the date of the transaction, to reflect the day-by-day updating required for the daybook. It is a suggested operational choice, not an obligation arising from the software, to keep distinct roles between those who enter data and those who sign the annual inventory, and to keep evidence of time-stamps and digital signatures when record-keeping is electronic.

07

Points to remember

• The retention period for accounting records is ten years from the last entry.
• The inventory must be signed within three months of the deadline for the income tax return.
• Small entrepreneurs are not subject to the record-keeping obligations under Article 2214.

08

Practical next step

Before your next year-end closing, check with your advisor which corporate books apply to your company form and set up a calendar covering numbering, signing of the inventory, and ten-year retention.