What happens to project records when a contractor retires, sells or closes?

This guide is general information, not legal, tax or accounting advice. Laws, contract terms and exceptions vary by state, by claim and by contract, so confirm how any of this applies to you with an attorney or CPA licensed where you work.

Your project records follow the deal structure. In a stock sale they stay with the company the buyer now owns. In an asset sale the purchase agreement decides which records go to the buyer, and the seller usually keeps access for taxes and claims. In a wind-down, the records stay with the owners. Either way, statutes of repose, state dissolution rules and IRS deadlines keep running after you've handed over the keys.

Who keeps the project records in an asset sale versus a stock sale?

In a stock sale the buyer buys the company itself, so its records, contracts and history stay with the entity. In an asset sale the buyer picks the assets and liabilities it wants, and the seller's old entity keeps the rest. That's why an asset purchase agreement needs a clause covering which records transfer, how long they're kept and who can see them after closing.

Conventus Law describes a stock sale as the buyer stepping into the seller's shoes and inheriting all assets and liabilities.

In an asset sale, Chuhak & Tecson notes that "the entity will be responsible for any liabilities not transferred." If you still own the liability for a 2019 job, you'll want the RFIs and change orders for that job.

Permanent Equity's guide to deal terms says both sides typically agree to give each other "reasonable access" to pre-closing records "for an agreed-upon number of years." In a stock sale, the buyer will want to keep tax records for as long as a tax claim can be brought against the business.

Your deal attorney decides how that clause is written. Before you sign, make a list of every system that holds project records (Viewpoint Vista, Procore, the file server, project email) and note which ones the buyer gets.

Does exposure on past jobs end when the company dissolves?

Exposure doesn't end automatically. The construction statute of repose runs from substantial completion, and dissolving your company doesn't restart it or end it. Separately, most states have a statute that sets how long claimants have to sue a dissolved corporation, and some let claimants reach assets that were distributed to shareholders. Which rule controls on a given job is a question for your attorney.

IRMI defines a statute of repose as a limit on "the time in which a claim may be brought against a contractor for damages arising out of defective work in improvements to real property." Each state sets its own period; see the construction statute of repose by state.

State dissolution statutes vary:

Minnesota shows how this plays out. In 2014 a Dakota County judge dismissed claims against a framing and window subcontractor on a Burnsville condo leak case because the sub had dissolved in 2008 and Minnesota's dissolution statute bars claims brought more than 2 years after dissolution, according to Minnesota Lawyer.

These are examples. Dissolution rules differ by state and don't replace the construction statute of repose or other claim periods, so check both with your attorney.

How long should you keep records after the business closes?

Keep them for the longest clock that still applies. The IRS says to keep employment tax records at least 4 years and keep income tax records 3, 6 or 7 years depending on the situation, or indefinitely if a return was never filed. Project records should last through the statute of repose in each state you worked in, plus 3 years.

The IRS "Closing a Business" page lists keeping records as one of the final steps, alongside filing a final return and canceling the EIN. It also says the IRS won't close your business account until all returns are filed and all taxes are paid.

Property records follow their own rule. The IRS says to keep them until the period of limitations expires for the year you dispose of the property, which matters when you sell trucks, equipment or a shop building in a wind-down.

Project records usually run longest. For the full schedule by record type, see how long a contractor should keep project records.

Somebody has to own the archive after the doors close. Name that person in writing, usually a former owner or the CFO, and make sure the records sit somewhere that doesn't depend on a software subscription you're about to cancel.

What do buyers and quality of earnings reviewers look at in your records?

A buyer's quality of earnings (QoE) team tests whether your reported earnings are real and repeatable. For a contractor that means WIP schedules tied to the balance sheet, gain and fade on individual jobs, backlog quality, and the status of change orders and claims. The team generally adjusts one-time items out of adjusted EBITDA, so a single large gain or cost won't carry into the earnings a buyer pays for.

CBIZ, in an April 2026 article for construction contractors, lists what a construction QoE checks:

• WIP integrity. Over and under billings on the WIP schedule reconciled to the balance sheet.
• Gain and fade. Patterns of margin gain or fade across projects.
• Change orders and claims. Whether each is approved, unapproved or disputed, plus collectability and timing.
• Backlog quality. Mix, margins, burn rate and risk by customer, geography and project type.
• Working capital. A normalized "peg," with seasonality and contract asset and liability patterns.

The Bonadio Group describes non-recurring items as "one-time or unusual transactions" outside the normal course of business. Because they don't reflect recurring earnings, a QoE typically removes them to reach adjusted EBITDA. Examples include one-time legal or consulting fees, fines, refunds and settlements.

How a specific item gets classified is a judgment call your CPA and the buyer's reviewers work out. Clean job cost and change order history can make that conversation shorter.

Checklist for handling records in a sale or wind-down

Start this list well before a letter of intent is signed. Most of the work is finding out where the records live and who controls them. Your attorney and CPA set the final retention periods and the deal language.

1. Inventory every system. List each place project records live: accounting and job cost, project management, estimating, the file server and project email. Note the years each one covers.
2. Confirm export rights. Check each software agreement for a full export in a usable format, and pull a complete copy before any subscription ends.
3. Flag open matters. Mark every job with an open claim, warranty issue or litigation hold. Nothing on those jobs gets destroyed or released.
4. Map records to the deal. In an asset sale, list which records go to the buyer and which stay with the seller, and get a post-closing access clause in the purchase agreement. Say who holds the right to license records after closing, in the agreement and the disclosure schedules.
5. Set the retention schedule. Use the longest applicable clock for each record type: statute of repose plus 3 years for project records, IRS periods for tax and payroll.
6. Name a custodian. Put one person in charge of the archive after closing, with a budget for storage.
7. List material contracts. Include any data license, software agreement or records-access agreement on the disclosure schedule your attorney prepares.
8. Keep a destruction log. Record what was destroyed, when and who approved it once a retention period ends.

How does a sale or retirement apply to licensing your project records?

A non-exclusive license lets AI companies use a copy of your estimates, RFIs, change orders, job cost, submittals and project email as training data. You keep the originals and ownership. Licensing before a sale or wind-down can turn an archive you're already paying to keep into cash. Plan the timing with your deal advisor and CPA, and disclose the license to a buyer like any other contract.

Conduit Data only brokers the license. The records stay in your systems, and your retention obligations don't change.

Timing matters for the deal. A QoE review usually treats one-time income as non-recurring, but how license income gets classified comes down to the facts and the negotiation between both sides' advisors. Your CPA should decide how it shows up in the financials a buyer reviews.

Jobs with an open claim or litigation hold should stay out of any license until your attorney clears them.

In an asset sale, the purchase agreement may decide who holds the right to license records after closing. Your deal attorney should settle that before signing.

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