Business Formation Documents: A Complete Guide for Small Business Owners

Introduction

Key Things to Know

1. 1

   Your choice of business structure (sole proprietorship, partnership, LLC, corporation) determines which formation documents you need and affects taxation, liability, and operational requirements.

2. 2

   MWBEs should prepare additional documentation for certification programs that can provide access to special contracting opportunities and resources.

3. 3

   Formation documents should anticipate future growth and include provisions for adding investors, changing ownership, or expanding operations.

4. 4

   State requirements vary significantly, so research your specific state's filing procedures, fees, and ongoing compliance obligations.

5. 5

   Working with a business attorney to draft or review your formation documents is an investment that can prevent costly legal issues in the future.

6. 6

   Proper formation documents not only establish your business legally but also create the foundation for business relationships, financing opportunities, and eventual business sale or succession.

7. 7

   Keep your formation documents updated as your business grows and changes to ensure they continue to serve your needs and comply with current laws.

Hawaii Requirements for Business Formation Documents

• Business Entity Selection (Hawaii Revised Statutes (HRS) Chapter 428 (LLCs), Chapter 414 (Corporations), Chapter 425 (Partnerships))

  Specifies the type of business entity being formed (corporation, LLC, partnership, etc.) and complies with the specific requirements for that entity type in Hawaii.

• Articles of Organization/Incorporation (HRS § 428-203 (LLCs), HRS § 414-402 (Corporations))

  The primary formation document filed with the Hawaii Department of Commerce and Consumer Affairs (DCCA) that establishes the legal existence of the business entity.

• Operating Agreement/Bylaws (HRS § 428-103 (LLCs), HRS § 414-301 (Corporations))

  Internal governing document that outlines ownership structure, management responsibilities, voting rights, and operational procedures.

• Trade Name Registration (HRS § 482-2)

  Registration of business name (if different from legal entity name) with the Hawaii DCCA Business Registration Division.

• Tax Identification Requirements (26 U.S.C. § 6109)

  Compliance with federal tax ID (EIN) requirements for business entities.

• Hawaii General Excise Tax License (HRS § 237-9)

  Registration for Hawaii's general excise tax (GET) which applies to all business activities in the state.

• Business Licensing Requirements (HRS § 436B (Professional and Vocational Licensing Act))

  Compliance with specific licensing requirements for the business type and industry as required by Hawaii law.

• Securities Compliance (Securities Act of 1933, Securities Exchange Act of 1934, HRS Chapter 485A)

  Compliance with federal and state securities laws if the business is issuing ownership interests or raising capital.

• Employment Laws Compliance (Fair Labor Standards Act, HRS Chapter 378, HRS Chapter 388)

  Adherence to federal and Hawaii employment laws if the business will have employees.

• Hawaii Prepaid Health Care Act (HRS Chapter 393)

  Compliance with Hawaii's mandatory health insurance coverage for employees working 20+ hours per week.

• Temporary Disability Insurance (HRS Chapter 392)

  Provision of temporary disability insurance for employees as required by Hawaii law.

• Workers' Compensation Insurance (HRS Chapter 386)

  Compliance with Hawaii's workers' compensation insurance requirements for businesses with employees.

• Foreign Investment Disclosure (Foreign Investment in Real Property Tax Act (FIRPTA), Foreign Account Tax Compliance Act (FATCA))

  Compliance with federal requirements for foreign ownership or investment in the business.

• Annual Report Requirements (HRS § 428-210 (LLCs), HRS § 414-472 (Corporations))

  Compliance with Hawaii's annual reporting requirements for business entities.

• Registered Agent Designation (HRS § 428-107 (LLCs), HRS § 414-64 (Corporations))

  Designation of a registered agent with a physical address in Hawaii for service of process.

• Business Record-Keeping Requirements (26 U.S.C. § 6001, HRS § 428-211 (LLCs), HRS § 414-470 (Corporations))

  Compliance with federal and state requirements for maintaining business records and financial information.

• Intellectual Property Protection (15 U.S.C. § 1051 (Trademarks), 17 U.S.C. § 101 (Copyright), 35 U.S.C. § 101 (Patents))

  Provisions for protecting the business's intellectual property, including trademarks, copyrights, and patents.

• Environmental Compliance (Clean Air Act, Clean Water Act, HRS Chapter 342)

  Compliance with federal and Hawaii environmental regulations applicable to the business operations.

• Privacy Policy Requirements (HRS Chapter 487J, California Consumer Privacy Act (if serving California residents))

  Compliance with privacy laws for businesses that collect customer information.

• Dissolution Provisions (HRS § 428-801 to 428-809 (LLCs), HRS § 414-381 to 414-403 (Corporations))

  Procedures for the proper dissolution or winding up of the business entity in accordance with Hawaii law.