Over 5 million new businesses were formed in the US in 2025, and a certificate of formation is among the first legal steps in that process. That filing turns a business idea into a legally recognised entity and sets the foundation for liability protection, banking, taxes and growth.

Below, you'll learn what information a certificate of formation includes, how it differs from articles of incorporation and what comes next after approval.

What's in this article?

• What is a certificate of formation?
  
• Why do you need a certificate of formation to start a business?
  
• What information is included in a certificate of formation?
  
• How does a certificate of formation differ from articles of incorporation?
  
• How do you file a certificate of formation with the state?
  
• What to do after your certificate of formation is approved
  
• How Stripe Atlas can help
  

What is a certificate of formation?

A certificate of formation is the document that officially establishes a limited liability company (LLC) under state law. Until it's filed and accepted by the state, your business isn't legally separate from you. Once it's approved, your company exists as its own legal entity, with the ability to own property, enter contracts, hold assets and take on obligations in its own name.

Why do you need a certificate of formation to start a business?

Forming an LLC through a certificate of formation shields your personal assets from business debts and legal claims. Without it, you're typically operating as a sole proprietor or general partner, which means personal liability and business liability are intertwined. Banks usually require proof of formation before you open a business account and lenders, investors, and payment processors rely on the certificate to confirm that the business is legitimate and properly registered.

States require formal entities to register so they can track who's doing business, apply tax rules correctly and enforce legal obligations. Many federal, state and local licenses can be issued only to an entity that already exists. In fact, the certificate of formation is often the first document you're asked for when you apply for permits, registrations, or regulatory approvals. As your business grows, nearly every major step, including raising capital, adding owners and expanding into new states, depends on its proper formation. An accurate certificate of formation makes those future steps easier and less risky.

What information is included in a certificate of formation?

A certificate of formation is intentionally narrow. States ask only for the information they need to legally create and track the entity.

Expect to provide the following:

• Legal business name: The name must be unique in the state and include the required identifier ("limited liability company" or "LLC"). This is the name the state will recognise and that you'll use for contracts, banking and filings.

• Principal business address: This is the business's main physical address. Some states also ask for a separate mailing address, if it differs from the principal address.

• Registered agent and registered office: Generally, an LLC must name a registered agent with a physical address in the state. This is the person or service authorised to receive legal notices and official correspondence on behalf of the business.

• Business purpose: While many states allow a broad, general-purpose statement that covers any lawful activity, others permit or require a more specific description. But many businesses keep this intentionally flexible.

• Management structure: LLCs are usually required to state whether they're member-managed or manager-managed. This tells the state who has the authority to act on the company's behalf.

• Names of organisers: The person who files the document for an LLC is the organiser. Some states also require a list of members, managers, or initial directors, while others don't.

• Duration of the entity: Most entities are formed with perpetual duration by default. Some states allow or require you to state this explicitly, especially if the business is intended to end on a specific date.

• Effective date: By default, the entity becomes effective on the date that the state accepts the filing. Some states let you choose a future effective date instead.

• Signature of the filer: The document must be signed by the organiser, who certifies that the information is accurate. This signature is what formally submits the filing to the state.

How does a certificate of formation differ from articles of incorporation?

A certificate of formation (often called articles of organisation) is used to create an LLC, while articles of incorporation are used to create a corporation. Articles of incorporation usually require corporations to specify authorised shares (and sometimes par value or classes), while LLC ownership is handled through operating agreements. Filing articles of incorporation signals that the business will generally be governed through a board of directors, officers and shareholders, while a certificate of formation for an LLC allows the business to be managed directly by its owners or by appointed managers.

Corporations face stricter ongoing requirements after formation, such as formal meetings, documented resolutions and shareholder approvals. LLCs have fewer mandated formalities.

How do you file a certificate of formation with the state?

You need to give the state exactly what it needs to form your business. Here are the steps to a successful filing.

Choose the state and entity type

File in the state where you're forming the business with the form for LLCs. Each state has its own requirements, fees and terminology.

Confirm your business name is available

States require that your business name be distinguishable from existing entities. Typically, the local secretary of state's website offers a searchable database to check availability before you file.

Designate a registered agent

You must name a registered agent with a physical address in the state. This can be an individual or a professional service, but it generally can't be only a PO Box.

Gather required details before you start

Having addresses, organiser information and purpose language ready can make filing faster and minimise errors. Many rejections happen because information is missing or inconsistent.

Use the state's official filing system

Many states require or encourage online filing through the secretary of state's portal. Some still allow paper filings, but online submissions are typically processed faster. The form will prompt you for the required information in a fixed structure. Accuracy matters, especially for names and addresses.

Pay the filing fee

Filing fees vary by state and entity type and are required at submission. Payment is usually made by card or bank transfer for online filings or by check for mailed forms. Processing times range from within the same day to several weeks, depending on the state and filing method. Many states offer expedited processing for an additional fee.

Receive confirmation from the state

Once you're approved, the state issues a stamped certificate or formal acknowledgment. This document is your proof that the business legally exists. Check the final document for errors as soon as it's issued. Corrections often require a formal amendment so you need to catch mistakes early.

What to do after your certificate of formation is approved

Once the state approves your filing, your LLC exists, but it isn't ready to operate yet. The following steps turn a legally formed business into a functioning one.

Create internal governing documents

LLCs should adopt an operating agreement. These documents define ownership, decision-making authority and how the business is run, even though they're not filed with the state.

Obtain an Employer Identification Number (EIN)

An EIN is required for taxes, hiring employees and opening financial accounts. Many businesses can apply online and receive an EIN immediately from the Internal Revenue Service (IRS).

Open a business bank account

Separating business and personal finances is important for accounting and liability protection. Banks typically require the approved formation document and the EIN to open an account.

Register for required taxes

Depending on your activities and location, you might need to register for sales tax, payroll taxes, or other state and local tax accounts. Formation doesn't automatically complete these registrations.

Apply for licenses and permits

Many businesses need federal, state, or local licenses to operate legally. These are issued only after the entity exists so formation is a prerequisite.

Set up accounting and recordkeeping

Establishing systems to track income, expenses and ownership from the start helps prevent compliance issues later. Clean records also make future fundraising or audits easier.

Address insurance needs

Many businesses obtain general liability, professional liability, or workers' compensation insurance soon after formation. Insurance adds another layer of protection beyond the entity structure.

Prepare for ongoing state compliance

Most states require annual or periodic reports, fees and updates to registered agent information. Missing these can cause the business to fall out of good standing.

With the legal foundation in place, the business can sign contracts, accept payments, hire employees and conduct day-to-day operations as its own entity.

How Stripe Atlas can help

Stripe Atlas sets up your company's legal foundations so you can fundraise, open a bank account and accept payments within two business days from anywhere in the world.

Join 75K+ companies incorporated using Atlas, including startups backed by top investors like Y Combinator, a16z and General Catalyst.

Applying to Atlas

Applying to form a company with Atlas takes less than 10 minutes. You'll choose your company structure, instantly confirm whether your company name is available and add up to four co-founders. You'll also decide how to split equity, reserve a pool of equity for future investors and employees, appoint officers and then e-sign all your documents. Any co-founders will receive emails inviting them to e-sign their documents, too.

Accepting payments and banking before your EIN arrives

After forming your company, Atlas files for your EIN. Founders with a US Social Security number, address and mobile phone number are eligible for IRS expedited processing, while others will receive standard processing, which can take a little longer. Additionally, Atlas enables pre-EIN payments and banking, so you can start accepting payments and making transactions before your EIN arrives.

Cashless founder stock purchase

Founders can purchase initial shares using their intellectual property (e.g. copyrights or patents) instead of cash, with proof of purchase stored in your Atlas Dashboard. Your IP must be valued at $100 or less to use this feature; if you own IP above that value, consult a lawyer before proceeding.

Automatic 83(b) tax election filing

Founders can file an 83(b) tax election to reduce personal income taxes. Atlas will file it for you – whether you are a US or non-US founder – with USPS Certified Mail and tracking. You'll receive a signed 83(b) election and proof of filing directly in the Stripe Dashboard.

World-class company legal documents

Atlas provides all the legal documents you need to start running your company. Atlas C corp documents are built in collaboration with Cooley, one of the world's leading venture capital law firms. These documents are designed to help you fundraise immediately and ensure your company is legally protected, covering aspects like ownership structure, equity distribution and tax compliance.

A free year of Stripe Payments, plus $50K in partner credits and discounts

Atlas collaborates with top-tier partners to give founders exclusive discounts and credits. These include discounts on essential tools for engineering, tax, finance, compliance and operations from industry leaders like AWS, Carta and Perplexity. We also provide you with your required Delaware registered agent for free in your first year. Plus, as an Atlas user, you'll access additional Stripe benefits, including up to a year of free payment processing for up to $100K in payment volume.

Learn more about how Atlas can help you set up your new business quickly and easily or get started today.