Business Formation Document (Articles of Incorporation or Organization)

General Information

The filing of a business formation documents begins the legal existence of a business entity. Available entity types and their respective business formation documents are:

  1. Corporation – Articles of Incorporation
  2. Limited Liability Company (LLC) – Articles of Organization
  3. General Partnership – Statement of Partnership Authority
  4. Limited Liability Partnership (LLP) – Statement of Qualification
  5. Limited Partnership, Limited Liability Limited Partnership (LLLP) – Certificate of Limited Partnership

Without making such a filing, the business entity cannot exist, and the business will operate as a Sole Proprietorship or General Partnership by default. These two entity types are disfavored because their participant(s) are subject to unlimited personal liability for business debts and obligations.

Purpose/Necessity

Filing of the business formation document (“Articles”) is the required first step in the operation of a business. It provides basic information about the business that is publicly available through the Secretary of State’s office. Consequently, the information contained in the Articles forms a contract among the business participants, the business entity, the state, and third parties. A business entity is required to follow its Articles and third parties are put on constructive notice as to its content.

Certain aspects or rights of the business must be specifically included in the Articles or they will not apply to the business. There is no opportunity to place such provisions in a business governing document (Bylaws, Operating Agreement, Partnership Agreement) instead. For instance, a corporation may eliminate its board of directors, a non-profit organization may impose personal liability on its directors or officers for the organization’s debts, and an LLC may allow members to dissent from amendments to its Articles of Organization only if the Articles specifically include the relevant provisions. See KRS 271B.8-010(3), KRS 273.187(2), and KRS 275.030(6), respectively.

It is not difficult to file a set of Articles that will be accepted by the Secretary of State and officially form the business. A business owner can simply fill in blanks on an empty form or substitute its information on a set of Articles used by an existing business. However, some more advanced legal knowledge is required to tailor the Articles to a specific business while complying with Kentucky law.

A business should have a set of Articles adapted to its particular ownership and managerial structure and to the nature of its business activity. The Articles should reflect the agreements or understandings among the business participants and cover likely business growth possibilities and liability exposure concerns. Personalized Articles can increase the liability protection afforded its participants, customize voting procedures, and cut down on the likelihood that future amendments (and accompanying legal and filing fees) will be needed.

Frequently Asked Questions

  • Does the business formation document have to be recorded?
    • Yes. After receiving confirmation that the document has been accepted by the Secretary of State, the business formation document must be recorded with the county clerk of the county in which the business maintains its registered office. KRS 14A.2-040(1). See also KRS 362.1-105(2).
  • Are there any special requirements for a non-profit organization’s business formation document?
    • To qualify for tax exemption, a non-profit business organization must satisfy the IRS’ “organizational test”. This means that the organization’s formation document must include specific language which limits the organization’s purposes, powers, and activities and places restrictions on the use and distribution of its assets. If the non-profit is a private foundation, it must agree to comply with particular internal revenue code provisions. See IRS Exemption Requirements – Section 501(c)(3) Organizations. Because most non-profits seek tax-exempt status, it is critical to file an appropriate version of the corporation’s Articles of Incorporation or the LLC’s Articles of Organization. Submitting Articles that include only the minimum required information will not permit the IRS to grant the tax exemption.
  • May the business formation document be amended?
    • Yes. While it is best to file the ideal version of the business formation document initially, the document may be later amended or restated as required. See, e.g., KRS 275.030 and KRS 275.035.Amendments are necessary if certain information that is required to be included in the business formation document is changed or updated. For example, if a Corporation decides that certain directors should be elected only by a particular group of shareholders, it must specifically authorize this feature in its Articles of Incorporation. See KRS 271B.8-040.If you would like or are required to amend your business’ Articles of Incorporation or Organization, our firm offers this service for a flat fee.
  • Can a business modify the statements in its business formation document with appropriate provisions in its business governing document?
    • No. A business governing document (corporate Bylaws, LLC Operating Agreement, or partnership Partnership Agreement) is an additional source of the business’ operating rules, but it is not meant to conflict with or supersede the business formation document in any way. Because the business formation document is publicly filed and recorded, it puts third parties on notice as to its contents. If there happens to be a conflict, the provision in the business formation document will control as to dealings with the state and third parties. See, e.g., KRS 273.247(4) and KRS 362.2-201(4).
  • Who may serve as registered agent?
    • A Kentucky resident whose business address is the registered office address. KRS 14A.4-010(1)(b)(1).A domestic business entity already formed in Kentucky whose business address is the registered office address. KRS 14A.4-010(1)(b)(2).A foreign business entity qualified to transact business in Kentucky whose business address is the registered office address. KRS 14A.4-010(1)(b)(2).The registered agent for a business entity may not be that same business entity itself, but the registered agent may be an individual officer or director (corporation) or manager or member (LLC) whose business address is the registered office address.Therefore, if you are forming your business in Kentucky and operate in Kentucky, someone within your business may serve as your registered agent. There is no need to separately purchase a registered agent service.
  • Does a General Partnership have to file a Statement of Partnership Authority?
    • No. According to KRS 362.1-303(1), this filing is not required. Nowadays, General Partnerships are rarely formed because other entity types are more advantageous from a liability or tax perspective. However, if a General Partnership has been formed and will continue, a Statement of Partnership Authority is beneficial because it may specify limitations on authority of certain partners that will be binding on third parties. For instance, it may specify that a certain partner may not enter into real property transactions on behalf of the partnership, which will prevent the partnership from being held liable if such a contract is formed.
  • Why file my business’ formation document through your firm?
    • Personalization and Conformity with Kentucky Law – The document will be personalized to your business, in accordance with Kentucky law. We offer legal advice as to certain provisions that may be beneficial for your business. Certain rights, duties, or obligations available for your particular business entity type may be expanded or restricted, as appropriate for your situation. This should provide greater protection and usefulness than what you get by using boilerplate forms. All Required Steps Included – The document will be recorded, as required by law, and returned to you when all filing and recording steps have been completed. Accuracy and Consistency – If other business services are purchased, such as through a business formation package, the document will be consistent with these other related documents, filings, etc.

Legal Services Offered and Cost

Draft and File Business Formation Document (For-Profit Corporation)
Legal fees: $150 flat fee

This includes:

  1. Review of client’s information to ensure legal requirements are fulfilled
  2. Answer client questions, make corrections, and obtain additional information as needed
  3. Completion of Articles of Incorporation
  4. Submission of Articles of Incorporation and filing fee with the Kentucky Secretary of State
  5. Submission of Articles of Incorporation with the appropriate County Clerk’s office
  6. All postage and mailing charges
  7. Email confirmation of business formation by Secretary of State and County Clerk with PDF

If you are ready to get started, please CLICK HERE to enter basic information using our secure online form.

Draft and File Business Formation Document (Non-Profit Corporation)
Legal fees: $150 flat fee

This includes:

  1. Review of client’s information to ensure legal requirements are fulfilled
  2. Answer client questions, make corrections, and obtain additional information as needed
  3. Completion of Non-Profit Articles of Incorporation
  4. Submission of Non-Profit Articles of Incorporation and filing fee with the Kentucky Secretary of State
  5. Submission of Non-Profit Articles of Incorporation with the appropriate County Clerk’s office
  6. All postage and mailing charges
  7. Email confirmation of business formation by Secretary of State and County Clerk with PDF

If you are ready to get started, please CLICK HERE to enter basic information using our secure online form.

Draft and File Business Formation Document (LLC)
Legal fees: $150 flat fee

This includes:

  1. Review of client’s information to ensure legal requirements are fulfilled
  2. Answer client questions, make corrections, and obtain additional information as needed
  3. Completion of appropriate business formation document
  4. Submission of document and filing fee with the Kentucky Secretary of State
  5. Submission of document with the appropriate County Clerk’s office
  6. All postage and mailing charges
  7. Email confirmation of business formation by Secretary of State and County Clerk with PDF

If you are ready to get started, please CLICK HERE to enter basic information using our secure online form.