What Does Every Startup Need?
Monday, December 4, 2017
Every entrepreneur dreams of creating that perfect startup, one with fantastic publicity, additional rounds of abundant funding, huge sales and continued success.
However, before your company can change the world, you should first protect its name and future ability to succeed as a business by legally incorporating it, whether it’s an LLC, corporation, limited partnership, non-profit corporation or benefit corporation.
Upon incorporation, it is helpful to create and maintain particular documents you will most likely need along your company’s journey. Generally, those documents include:
- Certificate of Formation (LLC), Certificate of Incorporation (corporation) or Certificate of Limited Partnership (LP) – this is produced upon incorporation by the state in which your company incorporates; it proves that your company has been formally and legally filed.
- Bylaws (for a corporation) or LLC Operating Agreement (for an LLC) – these are the framework of your company, and outline a plethora of important aspects of how your company will function.
- Bank Resolution Forms – you will need these when your Board of Directors (or members in an LLC) holds its first meeting. Banking resolution documents are drafted and agreed upon so the company’s banking needs are aligned with the responsibilities and benefits of the directors (or members).
- Certificate of Good Standing – you will need this document for real estate closings, loan approvals and other accounting and legal matters.
- EIN (aka Federal Tax ID Number) – no company can operate within the United States without an EIN. You’ll need it to open a bank account or get a bank loan.
- Stock certificates (corporation) or Membership Certificates (LLC) – these determine the amount and types of shares (or units, in an LLC) held by your corporation’s shareholders (or LLC members).
- Corporate Seal – Nowadays, most corporate seals are digital rather than an actual, physical seal; however, whichever type of seal you choose to utilize, a company seal is important, as it displays your company’s name, its year of incorporation and the state in which it was incorporated. A corporate seal may be used on a variety of corporate documents in order to declare their validity.
- Meeting Minutes template – Every corporation is required to take and maintain meeting minutes during both Board of Directors meetings and shareholder meetings. Using the same template for meeting minutes throughout a corporation’s history makes logistical sense.
If you have all of the above prepared for the first day your new company starts doing business, you will be ahead of the game and ready to conquer the business world.
THE AUTHOR OF THIS BLOG ARTICLE IS NOT A LAWYER AND HARVARD BUSINESS SERVICES, INC. IS NOT A LAW FIRM. THE ARTICLE ABOVE IS NOT INTENDED AS LEGAL ADVICE AND SHOULD NOT BE TAKEN AS LEGAL ADVICE. THIS SHORT ARTICLE IS STRICTLY TO MENTION SOME ASPECTS OF DELAWARE’S CORPORATION LAWS AND/OR LAWS RELATING TO OTHER FORMS OF ENTITIES WHICH YOU MAY NOT BE FAMILIAR WITH. WE RECOMMEND THAT YOU CONSULT WITH A LAWYER BEFORE FORMULATING A STRATEGY WHICH WILL BE SUITABLE FOR YOUR SPECIFIC CASE.