Good advice can be the key to a successful business startup.

Business Formation

Building a Foundation to Grow On

Starting a business is an exciting time. It's the best opportunity to lay a foundation to establish your business' structure and avoid liability and conflict down the road.

If you’re starting a partnership, you don't need a foundational document. Partnerships are created by the act of conducting business together. Once partners agree to begin a new venture, however, a partnership agreement is important to spell out the partners' rights and obligations. Most partnerships also register an assumed name with the Minnesota Secretary of State’s office that allows them to conduct business under a name other than those of the partners.

Corporations and LLCs come into existence when Articles of Organization (for LLCs) or Articles of Incorporation (for corporations) are filed with the Secretary of State. Articles are generally brief documents containing basic information about the business, such as the name and purpose. Most small businesses prefer to limit the information stated in the Articles, as they become public documents once filed and can be difficult to amend.

Business formation doesn’t end with filing Articles or creating a Partnership Agreement. Drafting rules for the operation of the company and for selling or transferring shares should be a top priority for every new business. Depending on the type of company, this can include Bylaws, Buy-Sell Agreements, Member Control Agreements, and more.