Does the description disclose side effects, auth requirements, rate limits, or destructive behavior?

Beyond the annotations (readOnlyHint=false, destructiveHint=false), it discloses the concrete side effects: an empty in-progress Company row is created, linked to the customer, and pinned as active. It also reassures that the previously active company is untouched and recoverable, which is exactly the state-change context an agent needs before a mutation.

Agents need to know what a tool does to the world before calling it. Descriptions should go beyond structured annotations to explain consequences.

Is the description appropriately sized, front-loaded, and free of redundancy?

Four tight sentences, front-loaded with the trigger condition before the mechanics and follow-on flow. Every clause carries distinct information (scope, side effect, next step, recovery path) with no restatement of the name or title.

Shorter descriptions cost fewer tokens and are easier for agents to parse. Every sentence should earn its place.

Given the tool's complexity, does the description cover enough for an agent to succeed on first attempt?

For a state-mutating tool with an output schema, the description covers the trigger, the created state, the active-company side effect, and the next action. Return values are named only as needed ('the response names it') rather than re-specifying the schema, which is appropriate.

Complex tools with many parameters or behaviors need more documentation. Simple tools need less. This dimension scales expectations accordingly.

Does the description clarify parameter syntax, constraints, interactions, or defaults beyond what the schema provides?

Schema description coverage is 100% and both parameters (context, llm_model) are optional analytics-only fields already documented in the schema. The description adds nothing about them, so baseline 3 applies — the schema does all the work and the description does not need to compensate.

Input schemas describe structure but not intent. Descriptions should explain non-obvious parameter relationships and valid value ranges.

Does the description clearly state what the tool does and how it differs from similar tools?

States a specific verb and resource (begin a brand-new Wyoming LLC formation) and scopes it explicitly to a second-or-further company, which separates it from the first-company formation path. It also names two siblings (list_companies, switch_active_company) so an agent can place it in the tool graph without opening a schema.

Agents choose between tools based on descriptions. A clear purpose with a specific verb and resource helps agents select the right tool.

Does the description explain when to use this tool, when not to, or what alternatives exist?

Gives an explicit trigger ('call when the customer explicitly asks to form a SECOND (or further) company'), names the alternatives for viewing and switching companies, and prescribes the follow-on step ('follow the standard formation flow from its first step'). Nothing about when or when-not to call is left to inference.

Agents often have multiple tools that could apply. Explicit usage guidance like "use X instead of Y when Z" prevents misuse.