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A Certificate of Formation or Certificate of Business Formation is a document filed with your respective Secretary of State to form a new limited liability corporation (LLC) under U.S. law. An LLC is legally established when the certificate of formation is filed and accepted by the state.
What's the importance of this document and how can Bizee make it easier for you to get one?
Let’s learn more.
There are different names for Certificate of Formation. In some states, it's known as a Certificate of Organization or Certificate of Business Formation, while in others, it’s called Articles of Organization.
It can also be easy to confuse a Certificate of Formation with Articles of Incorporation — however, there's one key difference. Articles of Incorporation is used to create a corporation (C Corp or S Corp).
A Certificate of Formation is designed to give the state body the information they need to determine whether or not to approve and authorize a new company to conduct business.
It’s typically a one to two-page document that includes the following information:
Be aware that each state has different filing requirements and a startup business service, like Bizee, or a lawyer can help you understand what you need to turn your company into a legal business entity.
Good question: What does a Certificate of Formation do?
Well, it does several things:
Having a Certificate of Business Formation makes it easier to secure necessary licenses and permits in your city or state, open a dedicated business banking account and file taxes.
Many a time, a Certificate of Formation can also aid in building trust and confidence with clients. The same trust applies to when and if your business requires hiring employees, as people want to work for those who are credible and operating lawfully.
Since 2004, Bizee has helped budding entrepreneurs get their coveted Certificate of Formation through Bizee's Formation Services for only $0 (only state fees are applicable). We can offer the same assistance to you.
The names can confuse a lot, but know that a Certificate of Formation is not the same as a Certificate of Authority.
What is the use of a Certificate of Authority? A Certificate of Authority comes in handy when you feel your business is ready to grow beyond the borders of the state it was registered in (the home state where you filed your Certificate of Formation papers). If you formed your company in Florida but wish to do business (open an office or warehouse in Georgia), you'd need a Certificate of Authority.
Ready to make your business legal? Follow these steps.
1. Go to your Secretary of State page to find out filing requirements.
A state-by-state LLC filing guide can help you quickly identify what's needed.
2. Gather all the information you need to complete the Certificate of Formation document.
All states require you have a Registered Agent that is residing in the state. You might also be asked to provide the contact information and signatures of all LLC members.
3. Complete the Certificate of Formation application.
States allow you to apply online or print the form, fill it and mail it in. For online filing, you may have to create an account.
Before hitting submit, check your application for accuracy. Here’s a guide to LLC forms.
Pay the necessary formation fees.
4. Follow up on filing with the state government.
There’s a huge variance on when you could hear back on whether the state government says “yay” or “nay” to your Certificate of Formation application. Therefore, we recommend keeping a copy of your submission record, which should include a processing timeline. Follow up if there is no progress for weeks.
If accepted, the state will stamp your application and upload your LLC information to public records. They will also mail you an approved, stamped and dated Certificate of Formation. This certificate is an accredited document that says the LLC was duly formed and is officially recognized as a legal entity in the state in which it was filed.
It might seem easy to file for a Certificate of Formation on your own, but there are several steps you can miss (like making sure you have a legal name that meets the state’s naming requirements). Working with a lawyer can be pricey, especially if you’re bootstrapping your way into entrepreneurship. Bizee has supported over 1,000,000 business owners in every step of their journey to file and form their LLCs.
Bizee has three different levels of business formation packages: Silver, Gold and Platinum.
Bizee packages are designed to fit your current and future journey needs. For someone who is just getting their feet wet in entrepreneurship and might not have many funds, the Silver Package provides everything a startup business owner needs to form their business for just $0 + state fee.
Swara Ahluwalia is a freelance content writer with experience in the technical, B2B and SaaS domain. She also has curated content for various lifestyle brands. In her downtime, you will most likely find Swara training for her next marathon or spending time with her two daughters.
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