LLC Articles of Organization (also called Certificate of Organization and Certificate of Formation) are essential for a limited liability company.
Together with an LLC operating agreement, they are the legal documents that govern how your LLC is run.
These documents should contain information about who can make decisions on behalf of the company, how property will be distributed, and what happens to shares if someone leaves their position with the company.
Without these essential legal documents, it may be challenging to do business at all.
What's more, companies that don't have organization articles often end up paying more taxes because they're not set up properly.
This blog post will show you what Articles of Organizations should include and why they're so important for your business success.
Why are Articles of Organization Important?
LLC articles of organization are extremely important for an LLC.
This legal document establishes the existence of your business and contains key information about it.
You should include the name, purpose, location, members (owners), managers, or other types of managing authority in these documents.
Laws may differ from State to State, so it is imperative to consult your state's laws concerning these documents.
Without articles of organization, an LLC cannot be created.
State laws require these documents to be filed with the state.
It is also necessary for an LLC to have articles of organization if it needs to enter into contracts or sue and be sued in court.
Without these legal documents, your company cannot exist as a business entity separate from its members (owners) and managers.
What Do Articles of Organization Contain?
Many states require that LLC articles of organization contain general information about your LLC.
This information includes the LLC's name, purpose (the reason it was created), and day-to-day operations.
It is important to include this information because your articles of organization will not be complete without it.
Apart from these general requirements, state laws vary on the other information you should include in your articles of organization.
However, they all require you to name at least one member (owner) or manager who will manage day-to-day operations.
It is also a good idea for a limited liability company to include its registered agent and street address and any business type that the LLC is qualified to do business with.
If you want to set up your Articles of Organization correctly, here are the points you should include, no matter what state you choose to do your business in.
LLC Name and Purpose
First and foremost, your articles of organization must contain the business name of your LLC and its purpose.
Before you complete this step, check whether your desired LLC name is not already taken.
Your Appointed Registered Agent
A registered agent can be a person or a service authorized to provide legal advice and receive legal documents and correspondence on behalf of the limited liability company.
This role can be performed by a member of the LLC, a law firm, a lawyer, or a family member.
The required information for your registered agent section includes your appointed registered agent (i.e., service).
The section should also confirm that the company has received the statement of acceptance by the registered agent and that the company is maintaining this statement in its records.
The Articles of Organization form should have a provision about the LLC's management structure.
While some of the business entities are member-managed LLCs, others are manager-managed LLCs.
Whether your LLC has one or more managers, the section should include their names and addresses.
Capital and Additional Contributions
LLC's capital contributions are each member's ownership interest in the form of money, property, or services.
Capital contributions must be included as a provision in your LLC's Articles of Organization and should describe these contributions and the agreed value of property contributed to the LLC.
The LLC Articles of Organization form should also clarify ownership interests and restrictions for each member if one or more members want to make additional contributions (contributions either by adding capital or services).
Additional contributions are made with money, property, goods, labor, or other items instead of cash.
How to File Your LLC Articles of Organization
For your LLC Articles of Organization to become valid, you need to file them with your State's Secretary of State.
The rate of the filing fee will vary from State to State.
The processing time will also depend on several factors.
Still, most notably, it will depend on the way you filed (online or via mail) and whether you opted for expedited processing.
Related Article: What is an LLC Corporate Kit?
Can I Form an LLC Without Articles of Organization?
No. Filing your Articles of Organization with the Secretary of State is necessary in order for your company to become a legal business entity.
How Do I Find My LLC Articles of Organization?
To find the Articles of Organization for an existing LLC, you'll have to know its name and the state where it was formed.
The Secretary of State's official website will have a search box where you can type in the name of the LLC.
Once you find the LLC's listing, you might be able to obtain the Articles of Organization straight from the website, or you'll have to fill out a form and pay a fee.
Are Articles of Organization Public Record?
Yes, LLC Articles of Organization are publicly available.
You have to include the registered agent's name and address in the Articles of Organization.
To avoid their private information being public, some LLC owners choose to utilize a registered agent service.
What Is the Difference Between Articles of Organization and Articles of Organization Professional LLC?
The difference between articles of organization and articles of organization for a professional LLC is reflected in the steps you'll take to file them.
A professional limited liability company is required to obtain business licensing before they can file the Articles of Organization.
A licensed professional must authenticate all PLLC filing papers by signing them and generally include a business license number or a certified copy of their professional license.
You must also submit your documents for approval to the state licensing board before submitting them to your state's secretary of state.
Because there is an extra approval stage, forming a PLLC takes longer than the regular LLC.
What Is the Difference Between Articles of Incorporation and Articles of Organization?
Articles of incorporation are filed by a business entity that is set up as a corporation.
A corporation also files its articles with the Secretary of State.
Still, in addition to the provisions an LLC includes in the articles, corporations need to specify the number of shares and a few additional points, depending on the state.
Do Articles of Organization Need to Be Notarized?
Unlike operating agreements, Articles of Organization might need to be notarized, depending on the state where you file.
Is Operating Agreement the Same as Articles of Organization?
An LLC operating agreement and LLC Articles of Organization are two different documents.
If you are setting up a limited liability company for the first time, you will need both.
An operating agreement will specify how you hire employees, conduct the company's business, handle emergencies when one of the members wants to leave, etc. In this light, an operating agreement is your internal document that outlines how the company is handled.
Unlike Articles of Organization, a document that the state requires, you don't necessarily need to have an operating agreement.
It is, however, extremely important to have it for various practical reasons.
Articles of Organization are the official document that you need to set up an LLC.
Ensure you do everything according to your state's law, including registering with the appropriate agency and filing these documents within a certain time frame.
Otherwise, you could end up losing some of those safeguards from day one. Make sure you have all the necessary articles for setting up an LLC before moving on.