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Clean energy projects require a corporate structure that provides investors with limited liability (protection against claims by creditors and third parties above the amount of their investment), reduces taxes to the greatest extent possible, and facilitates management's future plans. Corporations, partnerships, limited liability companies are common ownership structures.
Forming an entity requires filing documents with the corporation division in the jurisdiction and registering with tax authorities. Formation costs and annual fees vary by jurisdiction. Depending on the jurisdiction, the entity may need to name a third party service provider to receive legal notices.
We suggest seeking the assistance of counsel in forming an entity in order to ensure that all corporate requirements are satisfied. Counsel is essential where tax and investor preferences require varying an entity's governance structure from the "standard" format. Venture-backed companies typically involve complex capital structures that require legal counsel to negotiate and prepare documentation.
In addition to legal counsel, a number of other resources are available to assist in formation of an entity. Many non-legal firms can form basic entities for a modest fee. For the United States, Nolo Press publishes an excellent series of books available in physical and electronic form with up-to-date electronic forms for creating and maintaining basic corporations, partnerships and limited liability companies. The National Venture Capital Association have developed a set of venture finance model documents, which are freely available. VC Experts provides forms with guidance for venture-backed companies to their members. Finally, the corporations division in the jurisdiction of incorporation may provide guidance and forms specific for their jurisdiction.
Legal Documentation Online Forum
SAMPLE DOCUMENTS
National Venture Capital Association Model Venture Capital Financing Documents Suite
VC Experts
RESOURCES
Nolo Press Resource Center - Corporation
Nolo Press Resource Center - Partnership
Nolo Press Resource Center - Limited Liability Company
VC Experts
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- Not necessarily comprehensive, complete, accurate or up to date;
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- Not professional or legal advice (if you need specific advice, you should always consult a suitably qualified professional)
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