How To: Entity Formation Toolkit | SimplyAgree

If you work in corporate law, you will likely be asked to form an entity. Moreover, when asked to create an entity, the requestor may not provide explicit instructions listing all the necessary paperwork. If that is the case, please take a look at the table below for the basic steps needed to get your entity up and running! Make sure, however, to double check with your team to make sure you have everything needed prior to filing – this is just a guide!

Quick tip! There may be information needed to form the entity and/or complete all tasks that you do not have at the time the request is made. Your best course of action is to pull together all of the documents, make a list of all outstanding information, and then make one comprehensive request for information – this will ensure that no single piece of your information request is lost in the Outlook abyss!

Form your entity

1. Check the state’s Secretary of State website for the correct form.
2. Fill in the information and obtain the required signature.

File your form with the state

3. File your entity online (if the state allows), by mail, or you can use one of the many third-party providers to help with this process.
4. (Optional) Choose an option to expedite if you need evidence of formation quickly.

Obtain an Employer Identification Number (EIN) for the entity

5. Download the SS-4 form from the IRS website.
6. Once completed and signed, you can apply for the EIN online at this website.
7. Quick tip! A responsible party listed on the SS-4 can only obtain one (1) EIN per day, so make sure to start early, if necessary!

Foreign qualification (optional)

8. If your entity will be doing business in any state other than the one in which it was formed, make sure to file the documentation required to qualify your entity in a foreign jurisdiction. The form can be found on the Secretary of State’s website.

Some things to consider

Did the client’s lawyer form the entity?

If this was the case, we see some firms package together 3 documents known internally as an “LLC Kit”. This kit includes:

1. An acknowledgement by the organizer of the names and ownership percentages of the entity owners;
2. A resignation by the organizer of any role in the entity; and
3. An initial consent that includes information such as organization date, which state’s law will be used, and the names and titles of officers.

Your entity needs organizational documents!

If you’ve formed an LLC, you’ll need an initial Operating Agreement (aka LLC Agreement). Many Operating Agreements are revised, and significant detail is added, but it is usually beneficial to have an Operating Agreement in place when the entity is formed. If you’ve formed a corporation, the same idea applies, but the document will be called Bylaws.