Articles of Organization
This straightforward document is the company birth certificate. Filing fees and identification of a registered agent will almost always be required in conjunction with the filing of articles of organization.
Operating Agreement (a/k/a LLC Agreement in Delaware)
A well-drafted operating agreement describes how key business decisions are made, how profits and losses are distributed, and how meetings are held and conducted. It also outlines the scope of each member’s duties, powers, and responsibilities. It is not publicly available.
This agreement will establish the rights of each member and his or her relationship with other members, such as rights to transfer units/interests, rights of first refusal, rights of the company to redeem equity upon death or disability, and rights to put units/interests back to the company. An operating agreement can include terms typically found in a founder share restriction agreement, such as vesting on the founder’s units/interests and what happens in the event of the founder’s departure from the company, death, or disability. It can also include a buy-sell agreement and a possible solution to deadlock on governance and operational issues. More information on buy-sell agreements can be found here.
An up-to-date capitalization table is critical: it allows the founders to easily identify owners of the company and is typically one of the first documents a potential investor or buyer will want to see. In addition to tracking issued shares, the capitalization table should list holders of options and warrants and make note of any convertible debt. More information can be found here.
Founders Invention Assignment Agreement
If a founder leaves the company, are you sure he or she won’t demand the company stop using the founder’s intellectual property? An agreement by which each founder assigns to the company his or her right to all that has been invented or created will minimize the potential for future infringement claims and add important assets and value to the company.
Employee Proprietary Information and Invention Assignment Agreement
Similar to the founders invention assignment agreement, if the company has employees or contractors developing technology, products, processes, or other forms of intellectual property, the company will want its employees and contractors to assign and transfer any rights to those developments to the company (or evidence the intellectual property was created as “work for hire”) and to keep its confidential information confidential.
Standard Form Contract
If the company is dealing with customers or clients, it should have a standard form contract (or several, depending on business needs) that is favorable to the company. Though customers may negotiate certain terms, the standard form contract provides a starting point and assists the company in determining where it can be flexible and where it must stand its ground.