To form an LLC, you must first draft articles of organization. This simple document contains basic information about your LLC, such as the name of your company and its purpose. To formalize your LLC, file it with the appropriate state office. The way states refer to the document and the office where you will file it varies by state. This guide covers what LLC articles of organization are, how to file them, and some information you should know to make your LLC official.
What is in an Article of Organization?
Articles of incorporation, also known as certificates of incorporation, are documents that establish the existence of a corporation. You must file articles of organization with the state and pay a filing fee to form a limited liability company (LLC).
The information required varies, but the essentials include information about your incorporators and board of directors, business contact information, the purpose of your LLC, and signatures. Fees vary by state, but you shouldn’t have to pay more than $200 to file unless you need to make any changes.
Limited-liability firms are a common choice for small-business owners. An LLC is simple to set up and offers numerous benefits, including tax flexibility and liability protection for the owners. To form an LLC, you must file articles of incorporation with the state business filing agency where your business is located. Yet, there are a few things you need to do before and after filing your articles of incorporation. Articles of incorporation are only the first step in founding your company.
Why are Articles of Organization Needed?
An LLC has a separate legal identity from its owners. An LLC has the authority to sue and be sued, to hold assets, to open bank accounts, to execute contracts, and to incur debt. Running your company as an LLC provides various benefits. Members/owners, for example, have limited liability and are not individually liable for the company’s actions/debts. LLCs also have tax advantages that other types of enterprises do not have.
However, an LLC does not have legal existence until the articles of organization are filed and approved by the state. The articles make the existence, name, and contact information of the LLC public. They also tell you where to mail lawsuits and legal notices affecting the corporation.
What’s Included in the Articles of Organization
Articles of organization are normally brief formation documents of no more than a handful of pages in length. Although the specifics vary by state, your articles of incorporation should normally include the following information:
- The name of your company.
- The location of your LLC.
- The LLC’s purpose: You may be required to offer a brief description of your product or service. In some states, you can select a generic “for all legal purposes” description.
- The effective date that you will start the LLC: If you’ve already launched the business, check with your state’s business filing office for the effective date of the LLC. If you do not indicate a start date, the state will use the day that your filing is accepted.
- The registered agent’s name and address: This agent or entity must have a physical in-state address and be available to accept mail during regular business hours.
- The organizer’s name and signature: This is the individual who files the articles of incorporation. They could be, but do not have to be, a business owners.
Depending on the state, you may also be required to supply the names and addresses of the LLC’s members (or that the management of the LLC is administered by a manager). Furthermore, if your state does not offer a separate form for professional LLCs (LLCs owned by licensed professionals such as doctors and lawyers), you must indicate if your company falls into this category on your articles of formation.
How do you Create an Article of Organization?
Submitting your articles of organization does not have to be difficult, since there are numerous tools available to help you, including ones unique to your state. We’ve broken down a few steps for filing your articles of incorporation that should make the process run more smoothly.
Before filing:
To prepare for LLC ownership, you’ll need to complete a few procedures before submitting your articles of incorporation. Precise criteria vary by state, but most need you to have two things ready to go before filing your articles of incorporation.
#1. Choose your LLC’s Name
First, you’ll need to choose a name for your LLC, meeting the following requirements if required:
- The name must end with a designation of “LLC,” “L.L.C.” or “Limited Liability Company.”
- Can’t include words that are reserved for certain regulated industries (e.g. “insurance” or “bank”).
- The name must be unique from other LLCs operating in the state.
Most states, including California and New York, have databases where you can look for available business names. You can also use internet directories like Yelp, as well as the Yellow Pages and the Better Business Bureau, to identify accessible names.
Once you’ve decided on a name, you can check its availability with your state’s business filing office. You can even reserve a business name for 30 to 120 days in exchange for a price.
#2. Designate a Registered Agent
A registered agent, also known as a resident agent in some states, is a person or institution who accepts official mail and legal papers on your company’s behalf. When you file your articles of incorporation, you must identify your registered agent so that the public can easily contact your company for formal reasons.
If you have a physical location in the state where your firm operates, you can name yourself or a co-owner as the registered agent. You can appoint a company attorney as your registered agent if you have one. LegalZoom and other online legal firms charge an annual fee for registered agent services.
Once found, your LLC must keep a registered agent and notify the state if the agent’s identity or address changes.
Filing your LLC Articles of Organization:
To begin filing LLC articles of organization, you must first gather information about your company. The following is a basic explanation of how to submit articles of organization for your LLC.
#1. Visit your Secretary of State’s Website
The requirements for submitting articles of organization should be outlined on the website of your Secretary of State. Look for the following information:
- Articles of Organization for a Limited Liability Company
- Whether you can submit the form online.
- The filing fee. The fee ranges between $50 to $150 depending on the state, but it could be significantly higher in your state.
- Any additional instructions
#2. Gather your Information
Gather all of the information you’ll need to file before you file. Here is a list of some of the essential information that most states will ask of you:
#1. LLC name
You must give your LLC a name. It’s critical to verify your state’s business website to guarantee that the business name you desire isn’t currently in use.
#2. LLC address
You must enter your LLC’s actual address. In some states, an address rather than a P.O. box may be required. The website of your state’s Secretary of State will assist you in understanding the address requirements for your state.
#3. Start date
You must specify a start date. This is usually the day you file your articles of incorporation or the day your article or company is approved. If there are any precise start date requirements, your state will provide guidance.
#4. Registered Agent
A registered agent is someone you appoint to receive legal documentation for your company, such as service of process notices, government communication, and compliance-related documents. On your form, you must include the name and address of your registered agent.
#3. Prepare Additional Information
Your state will require you to submit more information, such as operational and organizational details, before you can finish your LLC’s articles of incorporation application. Here are some samples of questions your state may ask:
- LLC purpose: Some states may require you to state the objective of establishing an LLC. Certain LLCs, for example, must enter a single professional purpose upon filing, such as accounting services or law practice.
- LLC management: Will the LLC be managed by a manager or a group of members? You must be prepared to respond to this question. Member-managed LLCs often have fewer members who are actively involved in day-to-day operations. Manager-managed LLCs may include more members who aren’t involved in day-to-day management.
- Members: Several states need you to supply information about the LLC’s first members, such as addresses and names. Furthermore, there is no limit to the number of members you can include on your list.
#4. Fill up and Submit the Form
After providing the required information, you must submit your LLC articles of establishment for approval. According to your state’s filing requirements, you can either mail your papers with a check payment or file them electronically.
Tip: Double-check that your articles of formation are signed by the authorized representative of the LLC.
What Should You Do After Filing?
You can continue to be involved in the business creation process after filing. Here are a few things you can do:
#1. Get an EIN
An employer identification number (EIN) is a nine-digit number assigned by the IRS to businesses for tax purposes. An EIN is required to open a business bank account, obtain a business license and file taxes for your company.
#2. Create an Operating Agreement
While an operating agreement for your company is not essential, it is highly suggested to ensure that your business functions smoothly at all times. An operational agreement will include all pertinent information, such as member roles, succession plans, member titles, contribution requirements, and so on.
#3. Create a Bank Account
You can open a company bank account, which is a wise step because it separates your business finances from your personal finances and makes reporting and budgeting much easier. In general, this facilitates tracking, cost reporting, and tax filing.
#4. Get a Business License
Getting your company license ensures that you are in compliance with all state laws. To obtain one, you must first apply for one with your state.
How Do You Write an Article of Organization?
States will have a form available on their websites to assist you in creating an article or organization, saving you from having to start from scratch. The name and address of the registered agent and company registrar, the principal location of doing business, the type of business, the name of the company, and the purpose of the business are all common items that must be included in the article of organization.
Do I Need an Article of Organization?
If you intend to form an LLC, all states will need you to file an article of organization. Your LLC’s fundamental details will be laid out in an article of organization, which will be submitted with the Secretary of State’s office. Each state’s requirements will be available on the Secretary of State’s website, along with a form to fill out.
Is an LLC the same as Articles of Organization?
Although they both serve the same aim of presenting the specifics of your company, there is one significant distinction. Articles of organization are used by firms that want to incorporate an LLC. Articles of incorporation are used by firms that want to form a corporation.
What is the Difference between Articles of Organization and Articles of Organization Professional LLC?
The primary distinction between an LLC and a PLLC is that only professionals licensed in a state, such as architects, medical practitioners, and lawyers, can incorporate PLLCs. The articles of organization are similar to those for a conventional LLC, however, filing requires additional steps.
What is the Difference between Articles of Organization and Bylaws?
The articles of incorporation are the basic law of an association and are used to form the overall organization and governance of the association in order for it to gain corporate life. Bylaws are an association’s secondary law and outline how the group is created and run.
What is Article 3 of the Articles of Organization?
Article 3 specifies the name and contact information for the LLC’s Registered Agent. The person assigned to accept legal documents on behalf of the LLC is known as the Registered Agent.
Conclusion
An article of organization is a crucial document in the formation of a limited liability company. It is also used to establish the rights, powers, duties, liabilities, and other obligations of each LLC member as well as the LLC and its members.
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