Essential Corporate Documents
Every Company Has Needs
At Sternberg, Naccari & White, LLC, we form limited liability companies, and other corporations, for business owners and entrepreneurs regularly. Starting companies and helping business owners meet their goals is one of the most fulfilling things that we do.
While every company is different, but we recommend that your limited liability company should have some basic documentation to protect the members and the operations of the limited liability company itself.
There are a few critical documents that every organization should have with a fourth document that most limited liability companies should consider.
Formation Documents Are Necessary
For a limited liability company in the state of Louisiana, the principal formation document is the Articles of Organization.
The Articles of Organization registers basic information with the state concerning your limited liability company. Much of this information is then available to the public through the Louisiana Secretary of State website. Filing your Articles of Organization is a necessary requirement to form your limited liability company and enjoy the protections afforded under a limited liability company.
Federal Employer Identification Number
Your Federal Employer Identification Number provides the limited liability company with a unique tax identification number similar to a social security number for an individual. A Federal Employer Identification Number is required for tax filings for the limited liability company. It is also a requirement of formation in Louisiana. Additionally, many customers/clients will request your number prior to engaging in business with your limited liability company. You can’t get a bank account for your LLC without one!
Every Company Needs An Operating Agreement
An Operating Agreement is likely your most critical document when beginning a limited liability company. Though a limited liability company may function without an Operating Agreement, its members are bound to operate in accordance within the default provisions provided by state law. Limited liability companies are allowed to set their own rules concerning governance of the entity, as long as the rules do not violate state or federal law or public policy. This deviation from the default provisions provided by the state of Louisiana is accomplished through an Operating Agreement.
Operating Agreements often address several areas of a business’s operations including, but not limited to, formation, capitalization, allocations, distributions, rights, protections, and restrictions of the members, management, indemnifications, disposition or transfer of interests, withdrawal, redemptions, conversion, additional members, tax matters, dissolution, and binding authority. Agreeing to deviation from state law in these matters early can be critical in avoiding fighting amongst members in the long run.
Vest Your Employees with Employee Vesting Agreements
An Employee Vesting Agreement is a document in which an employee may earn a membership interest in a limited liability company either over time, by achieving certain benchmarks, or a combination of both. The intricacies of an Employee Vesting Agreement can be complex when considering issues such as voting rights, tax consequences, structural requirements, and protections such as cliffs. Nevertheless, Employee Vesting Agreements can be a great incentive to retain key employees or develop an interested party to purchase a closely held limited liability company.
Do you have all these documents set up? Are you wondering if your LLC or Company needs a tune up? Contact Sternberg, Naccari & White, LLC for your free consultation on whether these documents or others are necessary for your Company’s formation and growth.