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 Incfile make it easier for you to get one?
Let’s learn more.
Are There Other Names for Certificate of Formation?
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).
What Is Included in a Certificate of Formation?
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:
- Purpose of business
- Address of main office/principal location (physical street, no PO boxes)
- Official business name that meets state naming requirements
- Name and contact information of member(s)
- Name and contact of organizer
- Registered agent name and contact
- Date of effective — the date the business will start
- Duration — will LLC remain in business forever or till a certain date?
- Signature of organizer
Be aware that each state has different filing requirements and a startup business service, like Incfile, or a lawyer can help you understand what you need to turn your company into a legal business entity.
Why Do I Need a Certificate of Formation?
Good question: What does a Certificate of Formation do?
Well, it does several things:
- Proves your LLC was formed properly under state law and is legal.
- Gives you permission to operate in the state where you filed.
- Protects your personal assets from those of the business.
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, Incfile has helped budding entrepreneurs get their coveted Certificate of Formation through Incfile's Formation Services for only $0 (only state fees are applicable). We can offer the same assistance to you.
Is Certificate of Formation Same as Certificate of Authority?
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.
How to Get a Certificate of Formation
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.
How Incfile Can Help You Get a Certificate of Formation
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. Incfile has supported over 1,000,000 business owners in every step of their journey to file and form their LLCs.
Which Incfile Package Is Best?
Incfile has three different levels of business formation packages: Silver, Gold and Platinum.
- The Silver Package highlights include preparation and filing for a Certificate of Formation, unlimited business name searches and a full year of free Registered Agent service! It’s priced at $0 — you just have to pay your state’s required LLC filing fees.
- In the Gold Package, which is priced at a one-time payment of $199 + state filing fees, all the above services are included, plus securing an EIN number, drafting of an operating agreement, getting a bank account and business tax consultation. Let’s not forget the unlimited phone and email support, which makes this package worth investing in.
- The Platinum Package goes even beyond the above. For a one-time fee of $299 + state filing fee, Incfile will get you expedited services from the state and provide you full access to our lawyer-approved Business Contracts Library, so you have all the necessary contracts to protect your business. We'll even help you secure a domain name for your website (which is a must-do).
Incfile 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.