The “Articles of Organization” are the official founding documents for an LLC (Limited Liability Company). These documents are filed with the state government to legally create an LLC and establish the structure and purpose of the business. Articles of Organization are sometimes called “Certificates of Organization” or “Certificates of Formation”.
Typically, the Articles of Organization must include the following information:
- The name of the LLC
- The registered agent and registered office address
- The purpose of the LLC
- The names and addresses of the organizers
- Information about the management structure of the LLC (member-managed or manager-managed)
- Provisions for the distribution of profits and losses among members
- Information about the ownership structure, including the number of members and their respective ownership interests
- Any limitations on the authority of members or managers
- Provisions for dissolving the LLC
It’s important to note that the specific requirements for the Articles of Organization can vary from state to state. So, it’s always a good idea to consult the relevant state laws or check with a legal professional.
Requirements for Articles of Organization
The required information to file the Articles of Organization for an LLC varies slightly by state. It’s important to check the specific requirements before filing in the state. In addition, some states may require additional information or fees to be submitted along with the Articles of Organization. Typical Articles of Formation include the following information:
Name of the LLC
The name of the LLC must be unique and comply with the state’s naming requirements.
The full name and latest address of the registered agent responsible for receiving legal and tax documents on behalf of the LLC.
Principal Place of Business
The address of the main location where the LLC will conduct its business.
Purpose of the LLC
A brief description of the purpose or business activities of the LLC.
Information about the management structure of the LLC, such as whether its members or appointed managers will manage it.
Names and Addresses of Members
In some states, the names and addresses of the initial members of the LLC may be required.
Signature of Organizer
The signature of the person who is forming the LLC is known as the “organizer.”
How to File Articles of Organization LLC?
To file the Articles of Organization for an LLC, you’ll need to follow these general steps:
- Choose a name: The name of your LLC must be very unique and distinguishable from other business names in the state. It must include “Limited Liability Company,” “LLC,” or an appropriate abbreviation.
- Appoint a registered agent: The registered agent is responsible for receiving legal documents on behalf of the LLC. They must have a physical address in the state where the LLC is formed.
- Draft the Articles of Organization: This is the founding document of the LLC. It must include specific information required by your state. You can use a template or work with a lawyer to draft the document.
- File the Articles of Organization: Submit the completed Articles of Organization to the appropriate state agency, usually the Secretary of State or the Corporations Division. This can generally be done by mail or online. There will be a filing fee, which varies by state.
- Obtain an EIN: An EIN (Employer Identification Number) is a tax ID number for the LLC that the businesses use for tax purposes. You can obtain an EIN from the IRS for free by applying online or by mail.
- Comply with other state requirements: Depending on the state, there may be other requirements, such as publishing a notice of the formation of the LLC or obtaining licenses and permits.
Why Do You Need Articles of LLC?
The Articles of Organization are an important document that serves several purposes, including establishing the existence of the LLC. Articles of Organization must be filed when forming an LLC. They serve several purposes, including:
- Establishing the existence of the LLC: The Articles of Organization are the official document that establishes the existence of an LLC as a separate legal entity from its owners.
- Specifying the management structure: The Articles of Organization determine the management structure of the LLC, such as whether its members or managers will manage it.
- Providing information about the business: This document provides important information about the LLC, such as the name of the company, the registered agent, and the principal place of business.
- Fulfilling legal requirements: Filing the Articles of Organization is a legal requirement in most states and is necessary to form a valid LLC.
- Protecting the personal liability of owners: By establishing the LLC as a separate legal entity, this certificate help to protect the personal assets of the owners (known as members) from the liabilities of the business.
Example Template Articles of Organization for an LLC
The specific format of the Articles of Organization for an LLC will vary depending on the state in which the business owners form their LLCs.
Articles of Organization Example:
Here is a sample template for the Articles of Organization for an LLC in the state of [STATE]:
[Name of LLC] Articles of Organization
- Name: The legal name of the Limited Liability Company is [Name of LLC].
- Purpose: The purpose of the Limited Liability Company is to engage in any lawful business activity for which typically limited liability companies may be organized under the laws of [STATE].
- Registered Agent: The full name and recent address of the registered agent is [Name of Registered Agent], located at [Address of Registered Agent].
- Management Structure: The Limited Liability Company will be managed by [Member-Managed or Manager-Managed].
- Distribution of Profits and Losses: The distribution of profits and losses among members will be in accordance with their respective ownership interests.
- Ownership Structure: The Limited Liability Company will have [Number of Members] members, and their respective ownership interests are [Ownership Interests].
- Limitations on Authority: Members of the Limited Liability Company will not have authority to bind the company unless specifically provided for in the operating agreement.
- Dissolution: The Limited Liability Company may be dissolved in accordance with the provisions and conditions set forth in the operating agreement.
This document constitutes the Articles of Organization of [Name of LLC].
[Date] [Signatures of Organizers]
Articles of Organization Fee
The cost of filing the Articles of Organization for an LLC varies by state. On average, it ranges from $100 to $500, but it can be slightly different depending on the state. Some states may also require an additional fee for obtaining a certificate of good standing or for publishing a notice of the formation of the LLC.
To find out the specific fee for your state, you can contact the Secretary of State or the Corporations Division in the state where you plan to form your LLC. They will be able to provide you with the most up-to-date information on filing fees and any other requirements for forming an LLC in your state.
Articles of Organization Fee by States
The Articles of Organization fees can vary based on the state and any changes in state law, so it’s best to verify this information with the relevant state agency website. It’s essential to check with the Secretary of State or the Corporations Division in the state where you plan to form your LLC for the most up-to-date information on filing fees and other requirements.
Below is a list of some common states and their respective fees for filing the Articles of Organization for an LLC. This list is subject to change and is only intended to provide an example and a general idea of the fees for each state.
- Alabama: $180
- California: $70
- Delaware: $90
- Florida: $125
- Georgia: $100
- Illinois: $150
- New York: $200
- Texas: $300
- Washington: $200
- Virginia: $100
Where do Banks Check for Articles of Organization?
When a bank is considering opening an account for an LLC, they may check the Articles of Organization. This is because they need to verify the legitimacy of the business and obtain information. Banks typically check the records of the state where the owners formed their LLCs to confirm that the Articles of Organization were filed correctly and are in good standing.
The bank may also use the information in the Articles of Organization. They need it to assess the risk of doing business with the LLC and to determine what documentation and information are needed to open an account. This may include information about the members or managers of the LLC, the registered agent, and the tax identification number of the business.
In summary, banks verify the legitimacy of the business and obtain information about the management and ownership of the LLC.
Articles of Incorporation vs. Articles of Organization
The Articles of Incorporation and the Articles of Organization are similar in that they are both official founding documents. However, it is specific to Limited Liability Companies (LLCs) while the Articles of Incorporation are specific to corporations.
The main difference between the two documents is the type of business structure they represent. The legal business structure of an LLC provides limited liability protection to its owners (known as “members”). So, it means that the debts and obligations of the company generally cannot be fulfilled by their personal assets. In contrast, a corporation is a separate legal entity from its owners (known as “shareholders”). It doesn’t only offer more formalities and structure but also requires more regulations.
The information and provisions included in the Articles of Organization and Articles of Incorporation will also differ. They reflect the unique requirements and characteristics of each type of business structure. Some of the key differences include the following:
- Name: The name of the LLC or corporation must be included in the respective articles.
- Management Structure: The Articles of Organization will include information about the management structure of the LLC (member-managed or manager-managed). However, the Articles of Incorporation will specify the number of directors and officers and the method of election.
- Ownership Structure: This document will provide information about the ownership structure of the LLC. It also provides information about the number of members and their respective ownership interests. The Articles of Incorporation will specify the number of authorized shares of stock and the rights and preferences attached to those shares.
- Liability Protection: The Articles of Organization will describe the limited liability protection offered to members in an LLC. But the Articles of Incorporation will not specify the personal liability protection provided to shareholders in a corporation.
- Formalities: The respective articles will reflect the differences in the formalities and regulations required for an LLC and a corporation.
Articles of Organization vs. Operating Agreement
Businesses use the Articles of Organization and the Operating Agreement as two separate documents for forming and managing an LLC. The Articles of Organization are used to legally establish the existence of the LLC, while the Operating agreement outlines the internal governance and financial rules for the LLC. The law requires this document, while people highly recommend an Operating Agreement.
Below is a brief comparison of the two documents:
Articles of Organization:
- Purpose: The Articles of Organization are filed with the state to legally establish the existence of the LLC as a separate entity from its owners.
- Content: It typically includes information such as the name of the LLC, the address of its principal place of business, the legal name and recent address of the registered agent, and the management structure of the LLC.
- Legal requirement: Filing the Articles of Organization is a legal requirement in most states and is necessary to form a valid LLC.
- Purpose: The Operating Agreement is an internal document that outlines the operational and financial rules and procedures for the LLC.
- Content: The Operating Agreement typically includes information. For example, it includes the rights and responsibilities of the members, the allocation of profits and losses, and the management structure of the LLC.
- Legal requirement: While not required by law, an Operating Agreement is highly recommended for an LLC. So, it provides a clear understanding of the management and ownership structure of the business. Also, it helps to avoid disputes between members.