# Company formation

URL: /systems/legal-and-corporate/entity-formation · Id: `capability:entity-formation`

> Company formation creates a Startup’s own Company: it records the entity-type Decision, files the certificate and appoints directors.

Company formation creates a [Startup](/business/nouns/startup)’s own [Company](/business/nouns/company). It records the entity-type [Decision](/business/nouns/decision), files the certificate, appoints directors and starts the Company’s standing clocks.

## Contract
| Clause | Terms |
| --- | --- |
| Starts | A Graduation event: a cofounder is seated, the Startup raises, it is sold, or its traction warrants its own entity. A self-serve founder forms at creation. |
| Default | A corporation whenever a cofounder is seated or the Startup raises. An LLC only when the Decision records why. |
| Done by | The state of formation, with a filing agent as incorporator. |
| Signs | Directors and the tax-ID responsible party are natural persons ([Governance](/systems/legal-and-corporate/floor/governance), [Identity checks](/systems/legal-and-corporate/floor/identity)). |
| Then runs | [Founding documents](/systems/legal-and-corporate/founding-documents), [Tax IDs](/systems/finance/tax-ids), [Registered agent](/systems/legal-and-corporate/registered-agent) and [Bank accounts](/systems/finance/bank-accounts), then Startup transfer. |
| While held | Not used. The Studio-held entity covers the Startup until Graduation. |
| Records | The Company, its certificate and its directors in [Corporate records](/systems/corporate-records). |

## Verbs
| Verb | Object | Event |
| --- | --- | --- |
| [Company.incorporate](/business/nouns/company/incorporate) | [Company](/business/nouns/company) | [`Company.incorporated`](/business/events/Company.incorporated) |

## Interfaces
- [API](/code/api/reference)
- [SDK](/code/sdk/reference)
- [CLI](/code/cli/reference)
- [MCP](/code/mcp/reference)

## Upstream
incorporations.legal, under an Agreement.

## Example
A bookkeeping service for dental practices seats a cofounder with ten years in practice management. The [Legal Lead](/agents/legal/legal-lead) drafts the entity-type Decision for a corporation, reserves the name and files the certificate the same day. `Company.incorporated` fires, and founding documents start.