It is never an easy process to register a new business or operate an existing business. There is a wide variety of documentation required just to set up including company formation documents and also towards making it operational. Apart from business registration documents, any company may require documentation related to the specific entity type like bylaws, certificate of good standing, and apostille among others. An existing business may also require these documents if they have lost or misplaced them. Let’s try and delve deeper into an understanding of the different company documents most commonly required in all US states.
What are company formation documents and when are they required?
Company documents required by a business can vary according to the current status of the business. Startups require different types of company formation documents vis-à-vis documentation required for businesses that are already operational. These documents are integral towards successful registration of a new business as well as to keep an existing business operational. The documents required will vary according to the chosen entity structure. Most forms of business registration documents have to be filed with a governing authority in the state like the office of the Secretary of State or the Division of Corporations.
The company formation documents act as legal proof when it comes to the identity and existence of a company or entity. It is always recommended to keep these documents safely, especially at the registered office address as they may be required or referred to during the lifetime of such an entity. You may even be required to use the formation documents for starting a new business bank account or other business-related purposes.
Important Company Formation Documents
The company formation documents are important not only for establishing a new business but also for existing businesses that have misplaced or lost some of their important documents. The requirement and type of document are governed by the state laws of the jurisdiction in which the business is being registered. The most common business registration documents required according to the structure of entities are:
- Articles of Association – The Articles of association are one of the important company documents, which define the purpose of a business entity. The content of this type of business registration document may vary from one state to another although generally, this document constitutes information pertaining to the issuance of shares, dividend payment, voting rights, and financial records among others.
- Articles of Incorporation – The articles are considered the governing documents required for the incorporation or formation of a traditional C Corporation. The articles of incorporation contain relevant information regarding a C Corp including corporate name, street address, board of directors, registered agent for service of process, and stock information.
- Articles of Organization – The Articles of organization are the governing business registration documents when it comes to establishing a limited liability company (LLC) in any state in the US. In some states, it is also known as the certificate of organization and constitutes information pertaining to creating the duties, powers, rights, and liabilities between each member of the said LLC.
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Other Company Documents
A new business or a startup may require a wide variety of company documents apart from articles of association or incorporation. The documents required can vary according to the type of entity structure and the state of formation. Some of the most common company documents are:
- Operating Agreement for LLC – As the name suggests, this document focuses on the operational aspect of a limited liability company. This is also a legal document like any business registration document and its objective is to set forth a path that the LLC may follow in terms of operations and management.
- Organizational Minutes and bylaws – Organizational bylaws are required by corporations and they contain a detailed description of the rules as well as regulations governing an entity’s operation. These are not considered documents required for incorporation. Similarly, minutes are also a formal requirement for all types of corporations and help in maintaining a record of all annual meetings with the Board of Directors and shareholders of a corporation.
- Share Certificate for each shareholder – Every corporation has shareholders and such a person or institution owns a certain number of shares in the company stock. This information is required when filing articles of incorporation. This is a written document that has been signed on behalf of a corporation and is considered the legal proof of ownership of said shares in the entity.
- Member Certificate for each Member – It is known as an LLC membership certificate and is issued to each member of the said company. It is an integral part of the company formation documents as well as operations. This certificate specifies the claim of each member in the LLC. The certificate also helps the LLC structure its ownership, profits, and taxation.
- IRS Form SS4 – Application for Employer Identification Number – Form SS-4 is used primarily for obtaining an Employer Identification Number (EIN), which further helps an organization or entrepreneur in filing business and state taxes. This is not considered a part of business registration documents but is required for other purposes including opening business bank accounts.
- Nondisclosure agreement – An NDA or non-disclosure agreements help in creating a legal framework for protecting information and ideas from getting stolen. This is most common for businesses that enter into negotiations or partnerships with other businesses, individuals, or vendors. Since it is a binding legal contract; breaking an NDA will have legal ramifications, and penalties, and can even lead to criminal charges.
- Employment agreement – An employment agreement is also known as an employment contract or contract of employment or simply a job contract. This is not one of the key company formation documents but is an important document all the same. An employment agreement is a type of contract signed between an employer and employee outlining the terms of the job including work role, responsibilities, as well as obligations of either party.
- Apostille – An apostille is a type of authentication service provided by the Office of the Secretary of State to foreign nationals and U.S. citizens who are planning to use specific documents overseas. Some of the company documents that require an apostille include business registration documents, job certifications, distributorship agreements, deeds of assignments, and power of attorney among others.
- Certificate of good standing – A certificate of good standing is one of the important company formation documents. It verifies that a business entity like an LLC or a corporation has been formed legally and maintains active status by being compliant with annual requirements like filing of annual reports and taxes. This certificate is normally required by foreign entities.