How many times have we pulled out the ol’ game rulebook only to flip through and wonder what it was that we were looking at? By the fifth stage, we somewhat figure out how the game works. If we’re lucky, we’ve adjusted our strategy to work for the game. In that vein, it’s time for a mix of Jenney Games and the Cherry Team!

Enter: what are entity documents? When you’re establishing a company or corporation, you’re going to need a lot more than just a good business idea (and some gold coins). You’re going to need rules – the “how-to” guide of your new company. This “game rulebook” is known as an entity document.

Wait what??? You mean I can’t just draw up some plans on a napkin, hire some henchmen, and figure out what’s what when we get there?! The answer is, unfortunately, no. But don’t worry – we’re right here with you because, just like in a video game, the rules and regulations can definitely be over-complicated.

Entity documents lay out how your business is structured, how the business must operate, how management will work, and how the members will work together. These documents may even specify how financials are handled! Depending on the type of entity you choose, the documents associated can range from all encompassing to purely the game-spawn of your registrar and the state (and sometimes even those can be complicated!).

Got it? Easy-peasy, right?! Well… Just like not reading the entire game book when it comes to Super Mario Brothers (as you mindlessly flick your controller), skipping over the details of an entity document is not the best idea. Even if you’re hip to the game scheme, you may still need some guidance as to how to set up your rules and what you can and cannot do in this setting.

Some common pitfalls in entity documents range from forgetting some clauses, to adding ones that shouldn’t be missed or are completely contradictory to the nature of your business. But it’s not all doom and gloom! Sometimes, amendments (or “upgrades” as we’d prefer to call it!) are all it takes to keep your company moving smoothly along.

TL;DR – Here’s what you need to remember: entity documents (like articles of incorporation, operating agreements, bylaws, etc.) are like the cutscenes at the beginning of every video game. You’ve gotta know what’s in them (and future spoilers). You won’t be able to keep your goomba-fighting ways off-screen if you don’t know how to fight well. Also, nobody wants to have to pause the game to read the rulebook. Just don’t go tossing it off to the side when you know it’s right there with you.

If you’ve got yourself an Iron Man-style strategy for your entity documents, awesome. Let’s look at the data! If you don’t have a plan in place for how to structure your rules in the game, then it’s time to get our superhero team – the Cherry Team – to help you get set up. Check out our new article on the topic – what are entity documents.

For more information on business entity types and their requirements, you can visit the SBA website.