All nonprofit corporations must keep good corporate records. Those records help preserve directors' limited personal liability and protect the organization's tax-exempt status.
Good record keeping means preparing minutes of directors' and members' meetings and documenting important corporate decisions. Organize these materials in a corporate records book that also contains the articles of incorporation, the bylaws, and tax exemption determination letters from the IRS and the state tax agency.
Separately, financial transactions must be recorded in a bookkeeping system, and supporting financial records retained, in order to file the annual information return.
In Massachusetts, gross support and revenue also drive whether the accounting records must be reviewed or audited by an independent certified public accountant with formal financial statements prepared. The current thresholds are covered in the Massachusetts Compliance section of this library; do not rely on figures published in earlier years.
This article is general information for nonprofit leaders and is not legal, accounting or tax advice. Requirements change; confirm current guidance for your organization's fiscal year before acting.
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