Can I use an electronic signature?

Yes. Electronic signatures are legally binding under the ESIGN Act (15 U.S.C. §7001) and UETA where adopted, provided intent, consent, attribution, and record retention requirements are met.

Is notarization required for formation?

Most states do not require notarization for Articles or Certificates, but specific exhibits or powers of attorney may require a notary or RON; verify requirements with the Secretary of State or notary authority for the filing state.

What about remote online notarization (RON)?

RON is permitted in most states with permanent RON laws; identity-proofing and recording requirements vary. Use an approved RON provider and retain session recordings as required by state law.

How long should I keep signed proposals and formation records?

Retain formation records for the entity’s lifetime plus recommended post-termination periods, observe IRS minimums (IRC §6501(a)), and follow industry rules such as HIPAA 45 CFR §164.530(j) where applicable.

Does the eSignature provider need special certifications?

Choose a provider that meets required standards for your use case: HIPAA (BAA) for PHI, 21 CFR Part 11 for FDA-regulated records, SOC 2 Type II for enterprise audits, and AES-256/TLS encryption for secure transport.

Which signNow plan fits formation work volumes?

signNow’s Business and Business Premium plans support typical formation needs; Site License is available for high-volume usage. Confirm required features like bulk send, API, or advanced authentication when selecting a plan.

Electronic Signature
Templates
Miscellaneous
Business Formation Proposal

Business Formation Proposal

This template is fully customizable. Edit the text, fill out the fields, and send it for signature. Give it a try!

BUSINESS FORMATION PROPOSAL

Service Provider: Client Name:

Effective Date: on the day of , (the "Effective Date").

Recitals

WHEREAS, Service Provider is engaged in the business of advising and rendering formation, organizational and compliance services for business entities and has the experience, personnel and capability to provide the services described in this Proposal; and

WHEREAS, Client desires to engage Service Provider to perform entity formation and related advisory services in accordance with the terms and conditions set forth in this Proposal; and

WHEREAS, the parties intend that this Proposal will set forth the scope, deliverables, fees and other material terms for the formation of the Client's business entity.

Scope of Work

Service Provider shall perform the following services (the "Services") for Client in connection with the proposed formation of a business entity. Services include, but are not limited to, the tasks described below. Any services not expressly stated shall require written agreement and may be subject to additional fees.

Detailed Scope of Work Deliverables and Milestones

Entity Type and Jurisdiction

Proposed Entity Type (check all that apply): LLC C-Corporation S-Corporation Partnership Sole Proprietorship

Proposed Jurisdiction for Formation: Proposed Entity Legal Name:

Payment Terms

Client shall pay Service Provider the fees and reimburse expenses as described below. All fees are exclusive of taxes unless otherwise stated.

Fee Amount (total) Payment Schedule / Milestone Payments Late Payment Fee Expense Reimbursement

Term and Termination

This Proposal commences on the Effective Date and shall continue until completion of the Services or earlier termination in accordance with this section.

Anticipated Start Date Anticipated Completion / End Date Termination Notice Period

Either party may terminate this Proposal for material breach by the other party if the breach is not cured within the notice period set forth above. Termination shall not relieve Client of obligations to pay for Services performed and costs incurred through the effective date of termination.

Confidentiality

The parties acknowledge that, in the course of performing the Services, each may receive confidential, proprietary or non-public information of the other party ("Confidential Information"). Each party agrees to (a) maintain the confidentiality of the other party's Confidential Information using at least the same degree of care it uses to protect its own confidential information, but no less than reasonable care; (b) use Confidential Information solely for the purposes of performing obligations under this Proposal; and (c) not disclose Confidential Information to third parties except to employees, contractors or professional advisors on a need-to-know basis who are subject to obligations of confidentiality no less protective than those set forth herein. Confidential Information shall not include information that is or becomes generally available to the public other than as a result of breach of this Proposal, or that is lawfully obtained from a third party without an obligation of confidentiality.

Independent Contractor; Authority

Service Provider is an independent contractor and nothing in this Proposal shall be construed to create a partnership, joint venture, agency or employment relationship between the parties. Service Provider represents that it has full authority to enter into this Proposal and to perform the Services described herein.

Governing Law

This Proposal and any dispute arising out of or related to it shall be governed by and construed in accordance with the laws of the state of , without regard to conflicts of law principles.

Entire Agreement

This Proposal, together with any exhibits or attachments expressly incorporated, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, proposals and communications, whether written or oral. Any amendment or modification of this Proposal must be in writing and signed by duly authorized representatives of both parties.

Execution; Acceptance

Acceptance of this Proposal shall be evidenced by signature of an authorized representative of Client and Service Provider below. Upon signature, this Proposal shall become a binding agreement on the terms set forth herein.

Service Provider - Printed Name:

Service Provider - By:

Date:

Client - Printed Name:

Client - By:

Date:

What a Business Formation Proposal Is

A Business Formation Proposal is a written plan and formal offer prepared by a service provider, attorney, or entrepreneur that describes the steps, costs, and deliverables required to establish a new legal entity (for example, an LLC or corporation). It typically summarizes the proposed legal structure, initial filings, registered agent services, tax and compliance considerations, estimated government and professional fees, and a timeline for formation tasks. The Proposal is informational and contractual in part: it frames expectations between the preparer and the client before filings are submitted to the state.

Why a Clear Proposal Matters for Formation

A concise Business Formation Proposal reduces ambiguity about responsibilities, timing, and fees, and helps clients compare service options. It clarifies who will prepare and file documents, who will act as registered agent, and which state laws will govern formation and ongoing compliance.

Who Typically Prepares and Receives These Proposals

Service providers, attorneys, accountants, and entrepreneurs use Business Formation Proposals to set scope, costs, and timeline before formation.

Small business owners evaluating entity types and estimated fees
Law firms or incorporation services offering formation packages
Accountants or tax advisors coordinating EIN, tax classification, and state filings

Clear proposals support decision-making and document execution while reducing follow-up questions during the formation process.

Essential Sections of a Professional Proposal

A complete Business Formation Proposal presents scope, timeline, required documents, costs, legal roles, and post-formation steps so clients can approve and proceed with confidence.

Executive Summary

One- to two-paragraph overview of the recommended entity type, primary benefits, and the main deliverables that will be provided during formation.

Scope of Services

Detailed list of tasks included (preparing Articles/Certificate, filing with Secretary of State, obtaining EIN, drafting operating agreement or bylaws, registered agent setup, and initial compliance checklist).

Fees and Costs

Breakout of professional fees, state filing fees, notary or RON costs, and optional services such as expedited filing or registered agent fees.

Timeline

Milestone schedule from engagement to state filing and confirmation of registration, including any expedited windows and expected processing ranges.

Required Client Inputs

List of information and documents the client must supply (legal name, address, ownership structure, member/officer details, and signatures).

Post-Formation Steps

Actions after registration such as EIN application, state tax registration, initial resolutions, banking setup, and ongoing annual report requirements.

Step-by-Step: Completing a Business Formation Proposal

Follow these sequential steps to prepare, review, sign, and file the formation documents based on the approved Proposal.

01

Gather Information: Collect names, addresses, ownership, and IDs.
02

Draft Proposal: Outline scope, fees, and timeline.
03

Client Review: Client reads, asks questions, and requests changes.
04

Sign and File: Obtain signatures and submit filings to state.

Where to File and How the Filing Flow Works

This sequence shows standard routing from proposal approval through state filing and confirmation of entity registration.

Proposal Approval: Client signs the Proposal to authorize work.
Document Preparation: Preparer drafts formation documents for signature.
E-signature and Notarization: Signatures are collected; notarization if required.
State Submission: Articles filed with Secretary of State; confirmation returned.

Online Configuration: Typical Workflow Settings

When completing the Proposal online, apply these workflow settings to reduce signer friction and meet compliance needs.

Field	Configuration
Signer Order	Sequential or parallel signing
Authentication	Email link or SMS code
Notary Integration	Use RON provider if required
Document Retention	Enable PDF/A and audit log

Digital Signing and eSubmission Considerations

Choose a platform that supports required authentication, audit trails, and export formats before collecting signatures.

Authentication Options: Email and SMS codes
File Formats: PDF, DOCX, PDF/A
Integration Needs: CRM and cloud storage

Ensure chosen integrations and retention settings meet statutory and client requirements, and verify RON availability in the entity's state when notarization is necessary.

eSignature Pricing Comparison for Formation Work

Common eSignature vendors and representative pricing models for managing Business Formation Proposals and signature workflows; signNow appears first per vendor comparison rules.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	7-day trial	Varies	Varies	Varies	Varies
Bulk Send	Yes	Yes	Yes	Yes	No
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No
Envelope Cap	No envelope cap	100 envelopes/user/year	Varies	Varies	Varies

Common Risks and Penalties to Note

Administrative Dissolution: Loss of good standing

Late Filing Penalties: State fines and interest

Tax Reclassification: Unintended tax consequences

Document Rejection: State returns paperwork for errors

Registered Agent Failure: Service of process issues

Missing Signatures: Filing invalid or delayed

Practical Tips for Accurate, Efficient Proposals

Follow these best practices to reduce rework, minimize filing delays, and preserve the legal effect of formation documents.

Confirm Legal Names and Addresses

Verify the exact legal spellings and addresses against government-issued IDs and confirm registered agent address formats. Inaccuracies commonly cause rejections and require amendments that incur additional fees and processing time.

Separate Mandatory from Optional Fees

Present state filing fees, notary or RON charges, and professional fees distinctly from optional services (expedited processing, corporate kits). Clients appreciate clear line items when authorizing payments.

Specify Governing Law and Effective Date

Clearly state which state's law governs the formation and the effective date. These choices affect tax classification, annual report schedules, and the statute of limitations for claims.

Plan for Post-Formation Compliance

Include an initial compliance checklist (EIN, business licenses, bank resolution, annual reports) to prevent loss of good standing. Assign responsible parties and recommended retention periods for each record.

How Others Use Business Formation Proposals

Real-world examples illustrate how proposals streamline formation and client communications across industries.

Tim Martin — Martin Properties

The interface lets us process forms entirely online for clients.

Mobile-friendly signing reduced turnaround.
I can execute formation filings and deliver confirmations remotely while ensuring compliance and fast client acceptance.

John Butler — Fertility Centers of Illinois

The team used integrated workflows to get signatures across departments.

API integration reduced manual entry.
The result improved internal coordination, preserved audit trails, and simplified long-term recordkeeping for regulatory reviews.

Who Is Authorized to Sign the Proposal

Founder / CEO

The primary owner or executive who has authority to engage formation services should sign. Signatures should match the name and title recorded in Proposal fields to ensure enforceability and to align with bank and state verification requirements.

Registered Agent

A registered agent may acknowledge service setup but typically does not sign on behalf of the entity owners. If the agent provides service terms, the agent's authorized representative may sign that service agreement portion of the Proposal.

Supporting Documents and Export Options

Proposals usually list required attachments and describe how finalized documents will be delivered and stored.

Supporting Documents

Attach Articles/Certificate drafts, draft operating agreement or bylaws, ID copies for signers, and any pre-formation resolutions to ensure filings proceed without delays.

Export Formats

Provide signed documents as PDF/A for long-term retention, and offer editable DOCX copies for internal recordkeeping and future amendments when needed.

Version Control

Track draft versions and maintain an audit trail of edits and signatory actions to support disputes or regulatory reviews.

Security

Use platforms that store documents with AES-256 at rest and TLS 1.2/1.3 in transit and provide role-based access to limit who can download or modify proposals.

Frequently Asked Questions About Using a Business Formation Proposal

Answers to common questions about signature validity, notarization, storage, and platform capabilities when executing Formation Proposals.

Need help? Contact support

Can I use an electronic signature?
Yes. Electronic signatures are legally binding under the ESIGN Act (15 U.S.C. §7001) and UETA where adopted, provided intent, consent, attribution, and record retention requirements are met.
Is notarization required for formation?
Most states do not require notarization for Articles or Certificates, but specific exhibits or powers of attorney may require a notary or RON; verify requirements with the Secretary of State or notary authority for the filing state.
What about remote online notarization (RON)?
RON is permitted in most states with permanent RON laws; identity-proofing and recording requirements vary. Use an approved RON provider and retain session recordings as required by state law.
How long should I keep signed proposals and formation records?
Retain formation records for the entity’s lifetime plus recommended post-termination periods, observe IRS minimums (IRC §6501(a)), and follow industry rules such as HIPAA 45 CFR §164.530(j) where applicable.
Does the eSignature provider need special certifications?
Choose a provider that meets required standards for your use case: HIPAA (BAA) for PHI, 21 CFR Part 11 for FDA-regulated records, SOC 2 Type II for enterprise audits, and AES-256/TLS encryption for secure transport.
Which signNow plan fits formation work volumes?
signNow’s Business and Business Premium plans support typical formation needs; Site License is available for high-volume usage. Confirm required features like bulk send, API, or advanced authentication when selecting a plan.

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