Entity documents are usually the last thing an investor assembles and the first thing that delays a closing. Most of the problems are avoidable with an hour of preparation before you go under contract.
These questions cover exactly what lenders need and where files most often stall.
Quick answer
A typical entity file needs articles of organization, a fully executed operating agreement, a certificate of good standing, EIN documentation, and member or ownership information. Unsigned operating agreements are the single most common cause of delay.
Frequently Asked Questions
What entity documents does a lender need?
Articles of organization or incorporation, a fully executed operating agreement, a certificate of good standing, EIN documentation, and details of members or owners.
What are articles of organization?
The formation document filed with the state establishing the LLC. Lenders want the filed, state-stamped version rather than a draft.
Why does the operating agreement matter so much?
Lenders read it to confirm who has authority to bind the entity and sign loan documents. Without that authority established, the closing cannot proceed.
What is the most common documentation problem?
An unsigned or incomplete operating agreement. Many investors form an entity, receive a template agreement, and never execute it. Lenders will not accept it unsigned.
What is a certificate of good standing?
A state-issued document confirming the entity is active and current on its filings. It typically needs to be recent, often within 30 to 60 days.
What if my entity is not in good standing?
The file will generally stop until it is resolved. Common causes are missed annual reports or unpaid state fees, both of which are usually fixable but take time.
Do I need an EIN?
Yes, typically. Lenders request the EIN confirmation letter from the IRS as part of the entity documentation.
How long does it take to get an EIN?
It can often be obtained the same day online for eligible applicants. Foreign owners without an SSN may face a longer process, which is worth starting early.
What if I just formed the LLC?
Newly formed entities are generally fine, provided the documents are complete. Have the filed articles, executed operating agreement, and EIN ready.
Do all members need to sign?
Usually all members with ownership interests above a threshold sign the guarantee, and the operating agreement must authorize the signatories. Requirements vary by lender.
What about a manager-managed LLC?
The operating agreement should clearly establish the manager's authority to borrow and encumber property. Lenders read for this specifically.
Do I need a resolution authorizing the loan?
Many lenders request one — a document from the entity authorizing the specific transaction and naming who may sign. Ask early whether yours requires it.
What if my operating agreement is a generic template?
Templates are often acceptable if properly executed, though some lack the borrowing authority language lenders look for. An attorney review before you need it is worthwhile.
Do documents need to be notarized?
Some do, depending on the lender and state. Closing documents typically require notarization; formation documents usually do not.
How current do the documents need to be?
Certificates of good standing typically need to be recent. Formation documents and operating agreements do not expire, but must reflect the current ownership structure.
What if ownership has changed since formation?
Provide documentation of the change — amended operating agreement or membership certificates. Lenders need the current structure to match what they underwrite.
Do trusts require different documentation?
Yes, and typically more. Trust certificates, the trust agreement or relevant excerpts, and trustee authority documentation are commonly required.
What documents does a partnership need?
The partnership agreement, filed formation documents where applicable, EIN, and partner details. Requirements parallel LLC documentation.
Can I submit these digitally?
Almost always. Most lenders use secure document portals. Complete, legible scans in a single submission speed the process considerably.
When should I gather all of this?
Before you go under contract. Locating or correcting entity documents takes time, and doing it under a closing deadline is where deals get delayed.
