What do I need to send to the State?
Articles of Organization (Form through the
◦ Submit proper form to state and wait for
◦ Receive your assigned ID number
◦ Use ID Number for any additional filings (i.e.
to get an FEIN)
What is included in my Articles of Organization?
• Name of Corporation (Use LARA Entity Search)
• Name a Resident Agent
• Resident Agent is the individual that will accept service of a
lawsuit if you were ever to be sued.
• Name of Organizers
• Number of Shares (Corporations Only)
• Can include other items like dissolution agreements or
distribution of assets.
What is an Operating Agreement?
◦ Clearly lays out the way a business will be structured and operated.
◦ Governing document for business disputes.
What should it include?
◦ Choice of Law Provision
◦ Choice of Forum Provision
◦ Arbitration clause
◦ Triggers- What if someone commits a crime? What if they leave the
◦ Buy out provisions
Investors- Raising Capital
• Get Funding for Equity- trade off
• Begins with Angel Investors
• Venture Capital Infusion by Venture Capital Firm as
• Both Angel investor and venture capital groups forming for
• Private Equity- as businesses mature
• Give Up Control of Business
• Identifying the amount of money your project needs
• Identifying what you are willing to give up for that money
• Money plus
• Loans vs. Equity
• Proof of Funds
• Gives a glimpse of business
• No need for NDA at this point
• Take with you
• Prefer face to face with small group
• Print out vs PowerPoint- Do not email
• Set agenda day before with investors
• Overview of financials
• Executive Summary
• Business plan without the nuts and bolts
Pitch went well….
• Sign Non-Disclosure or Exclusive Negotiating Rights Agreement
• Both allow for confidential information to be exchanged
• ENRA is NDA on steroids, basically getting engaged and working towards a formal
• ENRA allows for negotiations just between the parties, while a general NDA may allow
• Investors loan company money
• Get paid back a certain percentage
• Reserve the right to convert some of the debt to equity
• This can be important especially if out of state investors though no out
of state restrictions for Michigan
• Used to get better terms for the loan ie lower interest rate
Equipment and Real Estate Financing
• Hard to get with new business
• Might have to personally guarantee
• Could do option of Land Contract
• Finance equipment through equipment dealers