Entity Formation

The repo is a document pack, not code. Markdown files you can edit in any editor: the entity decision matrix, both versions of the operating agreement template, the formation checklist, and a post-formation 90-day plan.

bash
git clone https://github.com/theblockchainbaby/yorksims-business-01-llc-formation
cd yorksims-business-01-llc-formation
open .   # or just browse the .md files

No build step. No dependencies. If you'd rather generate a filled-in operating agreement interactively, the LLC Operating Agreement Generator does that — same template, web form.

Don't overthink this, but don't get it wrong either. Here's the short version of the decision matrix in the repo:

• LLC — default choice for almost every solo founder or small team. Pass-through taxation, flexible ownership, minimal paperwork, strong liability shield if you capitalize it properly. This is what I use for everything.
• C-Corp (Delaware) — only if you are raising venture capital or planning to. VCs require it. Double taxation otherwise. Don't do this "just in case" — convert later if you actually raise.
• S-Corp election — not an entity, a tax election you put on an LLC or C-Corp once profits are high enough that the payroll-tax savings beat the added complexity (roughly $40k+ in net profit, talk to your CPA).

If you're a builder shipping products and not raising a round: LLC. Move on.

Three real options. The "form in Delaware/Wyoming for the secrets" advice is mostly oversold for small companies, but here's the honest breakdown:

• Your home state — simplest. One registration, one franchise fee, no foreign-entity filing. If you operate physically in one state, this is usually correct.
• Wyoming — what I use for the holding company. Strong charging-order protection, low fees, no state income tax, decent privacy. Worth it for a holding entity that owns other entities.
• Delaware — only if you're going the C-Corp / VC route, or you genuinely benefit from the Chancery Court for complex multi-party agreements. For a one-person LLC it's overhead, not advantage.

Note: forming out-of-state means you may still need to register as a "foreign entity" in the state where you actually operate. That's a second fee and a second filing. Factor it in.

This changes the operating agreement substantially, which is why the repo ships both versions.

• Single-member — you're the only owner. Taxed as a disregarded entity (income flows to your personal return). The operating agreement is short, but you still need one — it's part of what proves the LLC is a real separate entity and keeps your liability shield intact.
• Multi-member — two or more owners. Taxed as a partnership by default. Now the operating agreement matters a lot: capital contributions per member, ownership percentages, distribution rules, buy-sell provisions, right of first refusal, drag/tag rights, vesting. The repo's multi-member template has all of these as fill-in sections.

If you have co-founders, do the vesting conversation now, before you file. Standard is 4-year vest, 1-year cliff. The template has the language. The awkward conversation is cheaper today than after a falling out.

Open operating-agreement-single-member.md or operating-agreement-multi-member.md. Every bracketed field is a fill-in. The clauses that people skip and regret — these are already in there:

• Capital contribution math — how much each member put in, and the rule for additional contributions. Put a real number here. "$10" makes the entity look undercapitalized and weakens your shield.
• Distribution rule with a tax-distribution floor — the LLC must distribute enough each year to cover the members' tax liability on the profits. Otherwise you owe the IRS on money you never took home.
• Buy-sell provisions — what happens on death, disability, divorce, or a member wanting out. Right of first refusal at a fair-market valuation. Boring until you need it; impossible to add cheaply after a conflict.
• Management structure — member-managed (default, simplest) or manager-managed (cleaner if you have passive investors). The template branches both ways.

Then — and I mean this — pay an attorney $400–$800 to review it for your state. The template gets you 90% of the way; the attorney catches the state-specific 10% that the template can't know about.

Filing the Articles of Organization is the easy part. The repo's formation-checklist.md covers the parts people skip:

• File Articles of Organization with the Secretary of State
• Get an EIN from the IRS (free, takes 10 minutes online)
• Open a business bank account the same week — Mercury, Relay, or a local bank. Do not pay LLC expenses from your personal card. Co-mingling for two months quietly destroys your liability shield.
• Sign the operating agreement (you + any other members)
• Log the initial capital contribution as a transfer into the business account
• Register as a foreign entity in your operating state if you formed elsewhere
• Set up bookkeeping from day one — even just a spreadsheet, but separate
• Check whether your state/city requires a business license

You now have a properly formed entity, an operating agreement that covers the clauses that matter, and a checklist that keeps your liability shield intact. Modules 02-06 of the Business vertical go deeper — the operating agreement clause-by-clause, holding-company structure when you outgrow one entity, equity & vesting mechanics, contracts & sales, pricing without undercharging — and they’re free too, dropping over the coming weeks. Pro ($29/mo) is for the monthly live Q&A and the private community; Builder ($499/mo) adds direct email access and small-group coaching.