Many San Jose startup business owners already know that certain documents must be filed with the Secretary of State in order to properly and legally form their business entity. Fewer owners, however, know the specific legal consequences of these documents. The Articles of Organization is one such document, which promotes the effective ownership and management of a business. The experienced San Jose corporate attorneys at Startup Company Counsel can help entrepreneurs draft and execute Articles of Organization that best meet their needs.
The Articles of Organization is a detailed document that acts like a business charter. It sets forth certain basic information about the business, such as its name, date of formation, statement of purpose, principal place of business, the duration of the company (if it will not operate perpetually), and the management structure. States also require that the Articles list a registered agent for service of process. The agent is the person (or company) that is legally authorized to accept legal documents on behalf of the company.
How Articles of Organization Can Be Used to Benefit Your Business
The Articles of Organization can be used strategically to prevent a variety of future management problems. By proactively addressing these problems before they occur, the business owner can save the time, expense, and manpower for resolving disputes. For example, developing a clear management structure and detailing it neatly in the Articles of Organization can prevent future power struggles between business owners or managers. The Articles can also resolve disputes by delegating decision-making authority to a particular officer, manager, or owner.
The Articles of Organization can also be used to promote the founders’ vision for the company, and to prevent decisions that may lead the business away from these original intentions. A statement of purpose is not usually legally binding, but it can be used to resolve disputes between managers. Similarly, a set duration for the business can ensure that it does not outlive the purpose for which it was originally intended. These and other tools can be used to shape the future of a company to fit its founders’ visions.
Proactive planning can save significant expenses in the future. Power struggles between managers can result in impaired business operations, decreased profits, and even liability. Owners can sue a company for negligent management decisions. Such lawsuits can leave the company with vast amounts of legal fees and a headache for a considerable amount of time. This is an entirely avoidable problem. By detailing precise management structures in the Articles of Organization at the outset of a company’s existence, future disputes can be resolved by simply reading the Articles and finding the solution.
Experienced Corporate Attorneys to Meet All Your Business Formation Needs
At Startup Company Counsel, our experienced San Jose corporate attorneys can help you build a successful business from the ground up. Schedule a consultation today by calling (855) 353-5377, emailing admin@startupcompanycounsel.com, or submitting a request through our online contact form. We help new business owners file appropriate formation paperwork, access financing, ensure compliance with legal regulations, and meet other needs in order to allow the uninterrupted process of profitable business operations.
