# Phase 5: Define an Issuing Framework

This phase refers to the legal and structural setup that **allows the company to issue security tokens in a compliant and transparent manner. This includes ensuring that the issuer is a legally registered entity, authorized to raise capital and issue digital securities under its jurisdiction.** It also involves aligning the company's corporate documents and governance structure with tokenization requirements, such as passing board resolutions, updating articles of incorporation (if needed), and confirming the company’s legal capacity to conduct the offering. A proper issuing framework ensures the token issuance is recognized by law and protects both the issuer and investors.

In this phase, you will formalize the legal entity responsible for issuing the tokens by **choosing the issuing company**. This may be an existing domestic entity or a new company specifically formed for the tokenization project, such as a Special Purpose Vehicle (SPV). The choice depends on factors like tax efficiency, regulatory environment, and investor accessibility. Selecting the right entity type and jurisdiction lays the foundation for legal clarity and regulatory alignment.

Once the issuing company is selected, you must **align the token issuance with the company’s governance and legal processes**. This involves preparing and submitting key documents, such as a Board Resolution approving the token offering, and ensuring that the token rights and structure are integrated into the company’s legal framework. Additionally, you will need to **select and obtain any required licenses or regulatory approvals**, depending on the jurisdiction and nature of the tokens. This ensures the offering is fully compliant and legally enforceable, reducing risks and building investor confidence.


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