The consequences usually arrive later, on someone else’s schedule, such as the day a member, a lender, or a buyer asks for a document you cannot produce. Texas law sets a baseline list of records every business formed by filing a certificate of formation has to keep. It also gives LLC members an inspection right on a proper written demand and gives directors and managers their own rights. A limited liability company can be liable for a member’s costs and attorney’s fees when it refuses a proper request. None of that waits for a lawsuit. As a small business attorney in The Woodlands, I help owners build a records habit before it gets tested.
What Texas Requires Your Company to Keep on File
If you formed your company by filing a certificate of formation, it is what the Texas Business Organizations Code calls a filing entity, and the code assigns it a short list of records it must keep. The list is shorter than most owners expect, which is why it is easy to let slide.
Under the recordkeeping rules for Texas entities formed by filing a certificate of formation, each filing entity must keep:
- Books and records of accounts
- Minutes of the proceedings of the owners or members, of the governing authority, and of their committees, subject to an important exception covered below
- A current record of the name and mailing address of each owner or member
- Any other books and records required by the title of the code that governs that particular entity type
Those records need not live in a binder on a shelf. Texas allows them to be kept in written paper form or maintained through an information storage device or electronic data system, so long as they can be converted into written paper form within a reasonable time. A well-organized shared drive satisfies that format rule, provided the required items are actually in it. A shoebox of receipts and a vague memory of what the owners agreed to do not.
The Minutes Rule That Surprises LLC Owners
Section 3.151 lists minutes as a required record, but it does not stop there. That minutes requirement need not be met by a limited partnership or a limited liability company except to the extent its own governing documents require it.
That cuts both ways. If your company agreement is silent on minutes, the code does not separately impose that duty on your LLC. If your company agreement does require annual meetings and written minutes, you have obligated yourself, and the document you signed becomes the standard you will be measured against. I ask to see the company agreement before I explain meeting obligations to an owner.
One caution about how this topic gets framed. A recordkeeping rule is not the same thing as a rule about personal liability, and the two get blurred constantly. Texas does provide, in Section 101.114, that except as and to the extent the company agreement specifically provides otherwise, a member or manager is not liable for a debt, obligation, or liability of a limited liability company. That is a starting point rather than a guarantee. Whether records practices affect an owner’s personal exposure is a separate question that turns on the facts and on other laws.
The Extra Records a Texas LLC Has to Have Ready
Limited liability companies carry a second, longer list on top of the baseline, and this one comes with a deadline. An LLC must keep these items at its principal office in the United States, or make them available there no later than the fifth day after a member, an assignee of a membership interest, or a governing person submits a written request to examine the company’s books and records.
Among the added records a Texas limited liability company has to keep on hand are:
- A current list showing the percentage or other interest each member owns, and the members in each class or group if the certificate of formation or company agreement establishes any
- The company’s federal, state, and local tax information or income tax returns for each of the six preceding tax years
- The certificate of formation, with every amendment and restatement
- The written company agreement, if there is one, with every amendment and restatement
- An executed copy of any powers of attorney, and any document that establishes a class or group of members as provided by the company agreement
- A written statement of each member’s contributions, when further contributions come due, what events trigger them, what events require winding up, and the date each member joined
That last item has an escape hatch. If the same information already appears in a written company agreement, the company need not keep a separate statement of it. The company must also keep at its Texas registered office, and give a member on reasonable request, the street address of the principal office where this is maintained. Five days sounds generous until you try to reconstruct six years of tax filings and a contribution history nobody wrote down.
Who Can Ask, and What It Costs to Say No
Unless the company’s governing documents provide otherwise, a member of a Texas LLC, or an assignee of a membership interest, is entitled to examine and copy company records on written demand that states a proper purpose. Texas law allows the company agreement to modify this inspection right, but under Section 101.054(e) it may not unreasonably restrict a member’s or assignee’s rights to examine records under Section 101.502.
The right reaches records that are reasonably related to and appropriate for that purpose, at a reasonable time, at the principal office or another agreed location. Under a 2025 update to Texas law, those records do not include emails, text messages, or social media content unless the communication itself carried out a company action or the company agreement says otherwise.
The member does not have to show up personally, because the examination may be conducted through an agent, accountant, or attorney. Certain documents, including the certificate of formation, the written company agreement, and those six years of tax returns, must be provided without charge on written request.
Refusing a compliant request is where cost becomes concrete. A limited liability company that refuses is liable to that member or assignee for any cost or expense, including attorney’s fees, incurred in enforcing the right. That liability sits on top of any other damages the law allows. The company does have defenses if the requester misused information from a prior examination or was not acting in good faith or for a proper purpose, but those are arguments you have to win, not reasons to ignore the letter.
Directors and managers have their own path. A governing person may examine the entity’s books and records for a purpose reasonably related to their service, and if the entity refuses a good faith demand, a court may order the books opened and may award that governing person attorney’s fees. That particular right does not run to limited partnerships, which the code handles separately. A records dispute inside a Texas company does not stay a records dispute for long.
Building a Records Habit That Holds Up
The owners who rarely have this problem are not the ones with the best software. They are the ones who decide in advance where things live and who updates them.
Good practices to put in place now include the following:
- Keep one authoritative folder for governing documents, and treat every amendment as a new signed version
- Update the ownership and contact list the week an interest changes hands, not at year end
- Save tax filings in the same place every year and keep at least the last six
- Read your company agreement once a year and confirm you are doing what it says
- Name one person responsible for the records, and tell the other owners who that is
None of that takes long once it is a habit, and it pays off outside of disputes. When a buyer’s team runs due diligence in a small business sale or acquisition, these documents are close to the first thing they ask for.
Let’s Get Your Texas Business Records in Order
If you are not sure what your company agreement obligates you to do, or a records demand has arrived and the file is thinner than you would like, the fix is easier before a deadline attaches. I bring a former general counsel’s view of these problems to small businesses in The Woodlands and across Greater Houston. Let’s start with a quick call to see if we are a good fit. Contact my office to schedule a consultation.
This article is general information about Texas law and is not legal advice about your company’s situation.