What are business formation documents?

Before a company can begin to operate legally, it should file documents with the appropriate government authorities. These documents, called business formation documents, outline essential information about the business structure, ownership, and purpose. 

To file business formation documents, you will need to choose the type of business entity you’re forming, select a name for your business, check to see if it's available, and file the appropriate forms from your state’s Secretary of State office.

What are the types of business structures?

You have probably heard of an LLC, a Limited Liability Company. This is just one of the various types of business structures. 

Other types include sole proprietorships, partnerships, corporations, nonprofit corporations, and cooperatives.

Why do you need business formation documents?

Business formation documents establish you as a legitimate business. If you want to work with other businesses, sell products or services, or conduct any type of commerce, you must have your business formation documents filed. 

In other words, these documents prove that the company legally exists. They provide legitimacy and protection. 

Types of business formation documents

Now, don’t confuse business formation documents for business structures. A business structure is an LLC, a corporation, etc. A business formation document is what you need to file to make your business legit.

You typically need specific documents depending on the type of business you're forming. Contact a legal professional or your state’s Secretary of State office with any questions about your specific situation.

Please note that some of the formation documents mentioned below are not exclusive to the listed business types and may apply to others, too. 

Annual report

Some states require reports every year or every two years (the latter are called biennial reports). Texas, for instance, requires an annual report, while New York requires biennial reports. 

Corporations and LLCs: typically are required to file these

Articles of incorporation

Articles of Incorporation establish a corporation's existence. It's as simple as that. When you kick off your process of incorporation, this will usually be your first step. An article of incorporation includes the corporation's name, purpose, initial board of directors' names and addresses, number and type of authorized shares, type of corporate structure, and how long the corporation will last (if it's set to have a limited lifetime).

Required for: Corporations

Articles of organization

An article of organization establishes the LLC with the state and contains the company name, address, and other basic information.

Required for: LLCs

Business license(s)

If you’re setting up a restaurant or a store, you will need one or several business licenses (e.g., food service license, liquor license, business license, etc). These are just two examples of businesses that require specific licenses. Businesses in regulated industries will need one or various business licenses to operate and collect taxes.

Required for: Sole proprietors, partnerships, corporations, LLCs

Business name registration form

This form is required to register the business name with the state. Before filing the business name, check the name’s availability.

Required for: Sole proprietors, partnerships, corporations, LLCs

Certificate of formation

This document serves as proof that the company is established. It contains key information such as the name of the LLC, the effective date of its formation, and the name of the organizer and/or members.

Required for: LLCs

Corporate bylaws

These are rules that your corporation should follow. When setting up a corporation, you create your corporate bylaws. These should include information such as the name, purpose, address, members, voting rights, and the name and number of board of directors.

Required for: Corporations

Employer Identification Number (EIN)

Having an EIN is key to operating legally. To get an EIN, you should request it from the Internal Revenue Service (IRS). Then, the IRS uses this number to identify a business when tracking its business tax reporting.

Required for: Sole proprietors, partnerships, corporations, LLCs

Meeting minutes

Meeting minutes are notes from meetings. These are typically required after formation.

Required for: Corporations, except for those in Delaware, Kansas, Nevada, North Dakota, and Oklahoma

Operating agreement

An operating agreement sets the rules and the structure for an LLC.

Required for: LLCs in California, Delaware, Maine, Missouri, and New York

Partnership agreement

A partnership agreement defines the business practices (e.g., rules, responsibilities, roles, ownership, etc.).

Required for: Limited partnerships (LPs) and limited liability partnerships (LLPs)

Registered agent

The registered agent is the official point of contact between the state and the business entity.

Required for: LLCs, corporations, LPs, LLPs

Shareholders' agreement

This legal contract defines the relationship between shareholders and the company.

Required for: Not required but used by corporations

How to get business formation documents

You may be wondering where to get these documents. Let’s review a few options.

Check the state website

In what state is your business registered? Check the Department of State’s office for your state to determine which documents you need. For example, for a New York registered business, visit the New York Department of State.

Use templates

Using templates can save you time and, potentially, money. Make sure that the templates are up-to-date and comply with your local laws. 

Use a third-party service

Make sure that you’re using a reputable third-party service. Online legal services offer templates for Articles of Organization, Operating Agreements, and Bylaws. Many third-party services can reduce the risk of making errors while filing.

Hire a lawyer to draft or make edits, as needed

As needed, hire an attorney to draft or edit your business formation documents. The lawyer will typically file the necessary documents with the appropriate state agency. 

FAQs about business formation documents

What is business formation documentation?

Business formation documents legally establish a business entity, outline the company's structure, ownership, and management. These documents are also essential to open business bank accounts and file taxes.

What are the steps for producing business formation documents?

First, choose what business structure you’re forming (e.g., LLC, corporation, partnership, etc.). Then, choose a business name. After that, search your state’s business registration agency, such as the Department of State, to learn what documents your state requires. Then, file the documents. 

What is an example of a business process document?

A business process document is a guide that outlines instructions, procedures, and roles and responsibilities for a business activity. The document’s format can vary in format (e.g. It can be a flowchart, checklist, video tutorial etc.

Conclusion: Get started with Rho today

A business formation document officially establishes a company's existence and structure. It typically includes essential information (e.g., the business name, purpose, ownership details, management structure, and registered agent information). 

Business formation documents vary depending on the type of business entity and should be filed with the appropriate state agency.

Once your business is up and running and in a growing groove, get the support of a business banking platform with Rho. By automating expenses and transactions you can save time with accounts payable, expense management, and accounting integrations. You can save money by extending your runway and making the most of idle cash while nixing unapproved spend and unnecessary fees.

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Note: This content is for informational purposes only. It doesn't necessarily reflect the views of Rho and should not be construed as legal, tax, benefits, financial, accounting, or other advice. If you need specific advice for your business, please consult with an expert, as rules and regulations change regularly.