Entity_Docs_Review_Ebook

F O R I N T E R N A L U S E O N LY

An Insight into Entity Docs A Guide to Reviewing Entity Docs for Secure Real Estate Closings Corporations · LLCs · LPs · LLPs · General Partnerships · Joint Ventures

TITLE TALK WITH MIKE MOLINA

AN INSIGHT INTO ENTITY DOCS

OVERVIEW

OVERVIEW

What We'll Cover 01

Why Entity Docs Review Matters

02

Entity Type Requirements

03

Evidence of Good Standing

04

Good Standing Search Links by State

05

Out-of-State Entity Qualification

06

Quick Reference Summary

07

Q&A / Common Questions

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AN INSIGHT INTO ENTITY DOCS

G E T T I N G S TA R T E D

PROCESS

How to Review Entity Docs 1

Identify the Entity Type Corporation, LLC, LP, LLP, GP, or Joint Venture.

2

Confirm Good Standing Verify status in the entity's state (or nation) of formation.

3

Request the Required Documents The client provides the governing agreement — it can't be pulled from a website.

4

Fill Gaps if Documents Are Missing Use a Certificate of Authority or Corporate Resolution substitute, as applicable.

5

Confirm Signing Authority Before Closing Make sure the person signing is the person authorized to sign.

PURPOSE

Why Entity Docs Review Matters 1

2

3

Confirm Legal Capacity

Identify Signing Authority

Protect the Transaction

Verify the entity is legally formed

Determine exactly which person(s)

Give buyers a secure closing and

and authorized to hold real estate

are authorized to govern and sign

give lenders the confidence to

property.

for the transaction.

invest in the property.

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AN INSIGHT INTO ENTITY DOCS

ENTITY TYPE REQUIREMENTS

ENTITY TYPE REQUIREMENTS

Limited Liability Company (LLC) A flexible structure combining corporate liability protection with partnership tax benefits. Created by filing a Certificate of Formation with the Texas Secretary of State. Generally suited for small-to-medium real estate transactions. May be

DOCUMENTS REQUIRED

Articles of Formation (formerly Organization), and all amendments Rules and Regulations or Operating Agreement

domestic or foreign.

Client must provide: A copy of the Operating Agreement or Company Regulations, not retrievable from any website.

Proof of registration & good standing in state/nation of domicile

If the Manager/Managing Member is itself an LLC or corporation, obtain documents identifying who acts on its behalf. If no Operating Agreement exists, execute the "Certificate of Authority" form (obtained from a Title Officer — not available in Ram Quest/Settlor).

ENTITY TYPE REQUIREMENTS

Corporation (Inc.) A legal entity separate from its owners, formed by filing Articles of Incorporation with the Texas Secretary of State.

Typically suited for larger real estate transactions and used by bigger developers or investors. May be domestic (Texas) or foreign (another state or country).

Client must provide: A copy of the Corporate Resolution, this cannot be retrieved from any website.

If unavailable, the seller/buyer can execute Independence Title's regulated "Corporate Resolution" form (available in Ram Quest/Settlor).

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DOCUMENTS REQUIRED

Corporate Resolution (recordable form) authorizing the transaction Articles of Incorporation Proof of registration & good standing in state/nation of domicile

AN INSIGHT INTO ENTITY DOCS

ENTITY TYPE REQUIREMENTS

ENTITY TYPE REQUIREMENTS

Limited Partnership (LP) Composed of at least one General Partner (manages the business, personally liable) and at least one Limited Partner (provides capital, not involved in management, liable only up to investment). Created by filing a Certificate of Formation with the Texas SOS.

DOCUMENTS REQUIRED

Certificate of Partnership, and all amendments Limited Partnership Agreement Proof of registration & good standing for both LP and GP

Client must provide: A copy of the Partnership Agreement, not retrievable from any website.

If the General Partner is itself an LLC or corporation, its entity docs must also be reviewed to determine signing authority.

Certificate of Authority form applies if no Agreement is available.

ENTITY TYPE REQUIREMENTS

Limited Liability Partnership (LLP) Similar to an LP, but all partners carry limited liability and are protected from one another's liabilities. Must register with the Texas Secretary of State to obtain a Certificate of Formation. Requires two or more partners to operate.

DOCUMENTS REQUIRED

Certificate of Partnership, and all amendments Limited Partnership Agreement Proof of registration & good standing for both LP and GP

Client must provide: A copy of the Partnership Agreement, not retrievable from any website.

If the General Partner is itself an LLC or corporation, its entity docs must also be reviewed. Certificate of Authority form applies if no Agreement is available.

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AN INSIGHT INTO ENTITY DOCS

ENTITY TYPE REQUIREMENTS

ENTITY TYPE REQUIREMENTS

General Partnership (GP) Formed when two or more persons associate to carry on a business for profit. No written agreement or state filing is required, though a written agreement is recommended. Each partner has unlimited personal liability for partnership debts.

DOCUMENTS REQUIRED

General Partnership Agreement, with all amendments/supplements Evidence of good standing (Texas SOS) Assumed name certificate (DBA), if operating under one

Client must provide: A copy of the Partnership Agreement, not retrievable from any website.

If operating under an assumed name, a DBA must be filed with the county clerk where business is conducted. Certificate of Authority form applies if no Agreement is available.

ENTITY TYPE REQUIREMENTS

Joint Venture (JV) A contract-based undertaking between two or more persons to carry out a single business enterprise for profit. Under Texas law, a joint venture is treated as a partnership, and requires a written agreement outlining rights, authorization, and obligations of each party.

Client must provide: A copy of the Joint Venture Agreement, not retrievable from any website.

Unlike LLCs, LPs, LLPs, and GPs, the Certificate of Authority substitute does NOT apply to Joint Ventures. A missing Corporate Resolution-style form follows the same rule as Corporations.

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DOCUMENTS REQUIRED

Joint Venture Agreement, with all amendments/supplements Evidence of good standing (Texas SOS)

AN INSIGHT INTO ENTITY DOCS

SPECIAL CASE

SPECIAL CASE

Series LLC Not exactly the same as a traditional LLC.

K E Y FA C T S

Works like a "corporate umbrella" —

Master (Parent) LLC

one master LLC, multiple series beneath it

Series A

Series B

Follows the same formation rules as a traditional LLC (Articles of Formation

Series C

+ Operating Agreement)

Each series is independent, but all receive liability protection through the parent LLC.

Articles must include a provision allowing the LLC to establish separate series with their own rights, powers, and duties Common in both residential and commercial Texas real estate for added flexibility and investor protection

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AN INSIGHT INTO ENTITY DOCS

G O O D S TA N D I N G

UNIVERSAL REQUIREMENT

Evidence of Good Standing Required on ALL entity types, every transaction, no exceptions.

Texas Comptroller — Certificate of Account Status. Obtain certification of good standing directly from the Texas Secretary of State / Comptroller website: mycpa.cpa.state.tx.us/coa/Corporation.

Foreign entities (formed outside Texas) must provide proof of registration and good standing in their state or nation of domicile.

APPLIES TO ALL ENTITIES

Out-of-State Entity Qualification A common question for entities formed outside of Texas.

No Texas Qualification Required to Transact. An entity formed under the laws of another state does not have to qualify to do business in Texas in order to buy, sell, or encumber Texas real property.

Still required: good standing in its state of formation.

This exemption applies to every entity type — corporations, LLCs, partnerships, and joint ventures alike.

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AN INSIGHT INTO ENTITY DOCS

REFERENCE TOOL

REFERENCE TOOL

Good Standing Search Links by State The spreadsheet lists a direct search link for every state for evidence of good standing.

Good to know: Verification Prompts. When a closer clicks a state link in the spreadsheet, a browser security prompt like this may appear:

Click "Skip Verification" to continue to the search results.

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AN INSIGHT INTO ENTITY DOCS

QUICK REFERENCE

QUICK REFERENCE

Entity Requirements at a Glance Entity

Key Document

Missing-Doc Fix

Corporation

Corporate Resolution

Corp. Resolution form (Ram Quest/Settlor)

LLC

Operating Agreement

Certificate of Authority

LP

Partnership Agreement

Certificate of Authority

LLP

Partnership Agreement

Certificate of Authority

GP

Partnership Agreement

Certificate of Authority

Joint Venture

JV Agreement

Corp. Resolution form (Ram Quest/Settlor)

Good standing evidence is required on every entity type, regardless of category.

BEFORE YOU CLOSE

Top 10 Entity Red Flags Watch for these before authorizing a transaction.

1

Entity name mismatch

6

Manager is another entity

2

Entity not in good standing

7

Foreign entity not properly registered

3

Signer not named in governing documents

8

Missing amendments

4

Member-managed vs. manager-managed

9

Series LLC uncertainty

10

Last-minute authority changes

confusion 5

General Partner not reviewed

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AN INSIGHT INTO ENTITY DOCS

COMMON QUESTIONS

COMMON QUESTIONS

When the Client Has No Documents Q: Seller is an LLC (or LP / LLP / GP) with no Operating or Partnership Agreement?

A: They may execute a "Certificate of Authority." This underwriter-regulated form must be provided by a Title Officer — it is NOT available in Ram Quest/Settlor.

Applies to: LLCs, LPs, LLPs, GPs — NOT Corporations or Joint Ventures

Q: Seller is a Corporation with no Corporate Resolution?

A: They may execute the underwriter-regulated "Corporate Resolution" form. This form IS available in Ram Quest/Settlor.

Applies to: Corporations and Joint Ventures — NOT LLCs, LPs, LLPs, GPs

COMMON QUESTIONS

Good Standing & Entity Reinstatement My seller's entity is not in good standing. What do I do?

Texas-formed and out-of-state entities must satisfy all state tax filing requirements before reinstating their charter.

Direct the client to the Texas SOS via SOSDirect or SOSUpload (fax/mail also accepted). Reinstatement typically takes 5–7 business days.

512-463-5555 · corpinfo@sos.texas.gov · www.sos.texas.gov

Is a Series LLC the same as a regular LLC? Not exactly — a Series LLC acts as a parent umbrella over independent series beneath it, each sharing the parent's liability protection while remaining distinct. Formation and document requirements otherwise mirror a traditional LLC.

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F O R I N T E R N A L U S E O N LY