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As you know, Latitud Go does all of the heavy lifting for you during the company formation process. That leaves you with some light lifting: your part of the job is basically signing documents.
We wish you were left with no lifting at all, but we're afraid signing things for you would be forgery. And that's just not how we do things here, you know...
What we can do, however, is break things down for you. As much as we encourage you to go through all pages, we know that takes mental stamina.
We're sure you've already started. You were probably dying to make that your weekend read.
But time is of the essence and you don't want to sign documents without understanding what they mean. And you're right, you shouldn't – so here's a brief summary of everything:
For the Delaware LLC
We have local partners in the US to assist with your incorporation from start to finish, and all you'll have to do is write your name in the dotted lines every now and again.
Here's what you can expect to sign:
- The AWC, which appoints a member of the Latitud team as a temporary assistant secretary for the LLC. The assistant secretary will then be able to sign documents on your behalf – if they didn't, you'd have to go to the United States to sign them in person.
- An LLC agreement, defining the company's bylaws and members. The LLC agreement establishes you and your co-founders as its members, and it grants the validity of the AWC (which is signed by a member appointed as a manager on the LLC agreement).
- A unit purchase and restriction agreement, which is a vesting agreement between the founders and the company with the goal of protecting the business; it follows the standard 4-year vesting with 1-year cliff, and you can learn more about it here.
There'll be a separate agreement for each co-founder, signed by them and the co-founder who's acting as the incorporator. I'll give you an example.
Given the following cap table:
- John (incorporator)
- Mary
- Camilo
We require three batches of signatures:
- John (and John)
- John and Mary
- John and Camilo
All of these signatures piled up comprise what is called the "complete chain of power." That means that having several documents that reference each other ultimately makes more reliable a document that gives to the founders the ability to act on behalf of the LLC. This allows you to open an operating company in your country with the LLC as a partner.
After your LLC is created, we will notarize and apostile your documents in the US. This is necessary for getting a tax ID for the foreign entity in your country, and for the LLC to be set up as the sole owner of your LTDA. Once the docs are ready, we'll ship them over to Brazil via FedEx.
For the operating country
At this stage, you will be assisted by our partners BHub. You can opt-in or out of their additional accounting services based on your needs and preferences, and a corresponding Service Agreement will need to be signed with them.
For your LTDA's company formation, your signature will also be needed on:
- An Instrument of Constitution (Contrato Social) to establish your local entity's bylaws, members and internal regulations, with signature required from all administrators.
- A Power of Attorney document that grants the BHub team the authority to make the necessary filings to open your company.
- A Certidão de Estrutura Corporativa, which is filed with local authorities to provide visibility into the individuals behind your company's corporate structure.
For banking purposes
In order to be able to set up bank accounts for your legal entities, you will first need to establish their Employer Identification Number, often referred to as "EIN". An EIN is a unique nine-digit number that identifies your business in the eyes of the IRS (Internal Revenue Service, the US tax collection agency), much like a tax ID.
You will need an EIN for your Delaware LLC to be able to set up a US bank account, and we'll take care of obtaining it for you. For that, we'll need your signatures on:
- A Form SS-4, the IRS application for an EIN; you will need one for the Delaware entity, and one for the Cayman Islands holding.
- A Form 8821, which authorizes the IRS to disclose your confidential tax information to the person you designate – in this case, the partner taking care of your US incorporation; you will need one for the Delaware entity, and one for the Cayman Islands holding.
- The W9 form package, a collection of IRS forms that establishes your LLC's taxation treatment as a disregarded entity, meaning you would not be subject to corporate taxes. You'll need one package for the company, and one per co-founder who is a US resident (if any).
Final documentation
A few final touches needed to make sure everything is signed, sealed, delivered:
- Consent for resignation of assistant secretary, which removes the Latitud partner previously appointed as assistant secretary for your LLC. Having this temporary appointment is absolutely crucial to enable us to open your local operating company on your behalf, but once everything is all set, it's just as easy to reverse.
- PIIAs, a.k.a. Proprietary Information and Inventions Assignment, to transfer all of the intellectual property generated by the founders to the company. Whenever you’re going through a due diligence process, this is the first set of documents investors will ask for! Each co-founder will sign their own individually.
We're here to help!
Yes, it's a lot to take in – but you'll be back to your more pleasant weekend reads in no time, we promise!
We want the procedure to be as low-effort on your side as possible, and hope this overview of the actions required on your end can make you sleep easier at night.
Still have questions? Reach out at go@latitud.com and we'll be happy to answer them.