Preparing for the future by drafting the articles of organization

“How can a business be successful?” “Planning” isn’t the most glamorous answer. However, drafting a business plan with specific action points articulating when and how the business expects to be profitable is the best map to success.

Essentials Only: How to Form an LLC

Forming a limited liability company involves much more than running a small team from a rented co-working space, adopting user acquisition techniques and or writing a mission statement. It requires being legally recognized by the State, which is done through articles of organization (also known as incorporation). Going from working solo to hiring employees, reporting profits and paying business taxes is a big change, both structurally and procedurally. There are standard clauses within articles of organization that recognize the business as a legal entity separate from its employees or founders. First, one must determine the type of structure (LLC, professional LLC), the business purpose, the names of the members and how records will be managed, as well as what will happen if a claim is made against the filed articles.

Drafting Articles of Organization That Strengthen the Business Long-Term

Founders can use the articles of organization to articulate specific clauses that outline how the company operates, what strategies are acceptable for profit-earning activities and who is in charge of day-to-day business decisions. These agreements depend on what expertise each team member brings to the table, who has “controlling” or “equity” shares (based on how much investment that individual has made in the formation of the company) and what happens when members wish to divest. Conversely, what happens when members wish to expand the company? In a corporate business entity, members have “equal voting rights” when it comes to decision-making, so the articles of organization must address situations like deadlocks.

Forecasting and planning in this way keep business relationships running professionally – which, in the end, keeps businesses moving towards success.