Purposes of File Retention continued

Statutory Requirements

There are statutory provisions that relate to the retention of documents, and you should return to your client any original documents your client is required to retain. The returned documents should be accompanied with a letter advising of the statutory requirements. If you have accepted instructions from your client to retain documents until the statutory requirements are fulfilled, it is the best practice for you to confirm your agreement in writing and address issues such as the cost of retaining the file documents.

Some of the more common statutory file retention periods follow:

Statute or Rule

Documents to Retain Period
Business Corporations Act, S.B.C. 2002, c. 57 entire record book 10 years from dissolution or cancellation
Canada Business Corporations Act, R.S.C. 1985, c. 44 entire record book six years from dissolution
Income Tax Act, R.S.C. 1985 (5th Supp.); IT Reg. 5800, and Info Circular No. 78-10R4 records and books of anyone carrying on business, or who pays or collects taxes six years after the end of last taxation year to which they relate, or from the date the return is filed
Law Society Rules 3-68 to 3-71, and 3-75, 3-87 lawyer's trust and non-trust books, records, and accounts at least 10 years (three years of which must be at place of practice), longer if applicable $ still in trust

Other legislation may have statutory requirements for document retention; see for example, the provincial taxation and employment statutes.

Future Needs of Lawyer or Client

When creating your file closure policy, you should consider the types of files at hand and the practical future needs of you and your client. Your files contain valuable precedents and original documents.

Community Discussion

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Another reason to retain records can be that a client might for example need proof of what their source of funds were on for example a real estate purchase.