Who Is the Organizer in an LLC? (Duties and Responsibilities)
If you plan to establish a limited liability company, you may employ the service of an LLC organizer, or the company may appoint a qualified member.
As an expert in business, I gained over a decade of practice helping clients with LLC formation and organization.
After comprehensive research and analysis and consultations with our legal experts, I'll explain the organizers in an LLC, as well as their duties and responsibilities.
Quick Summary:
- The organizer in an LLC is any qualified individual or company responsible for filing the Articles of Organization.
- Lawyers, business formation services, the LLC's registered agent, or an LLC member can be the organizer.
- According to the U.S. Small Business Administration, approximately 70% of LLCs choose to file their Articles of Organization with the Secretary of State.
- From my personal view, it's advisable to employ a business formation service since the LLC's creation is handled professionally.
Who Is an LLC Organizer?
An LLC organizer is the person or entity who sets up the company.
The LLC organizer is responsible for filing all legal documents and ensuring that everything meets state requirements.
Once the organizer has filed the Articles of Organization which includes the LLC's name, registered address, list of its members, and representative agent, their duty is officially complete.
What Does an LLC Organizer Need to Do?
An LLC organizer must file the Articles of Organization with the state, appoint a registered agent, create an operating agreement, and fulfil state-specific requirements for officially forming and registering the LLC.
From my experience, one of the most important LLC formation documents is the Articles of Organization or the Certificate of Formation, as it's called in some states.
The LLC organizer files the LLC Articles of Organization with the state agency, usually the Secretary of State. According to the U.S. Small Business Administration, approximately 70% of LLCs choose to file their Articles of Organization with the Secretary of State.
The Articles of Organization contain basic information about the LLC, such as its business name and address, the purpose or business of the company, the registered agent name, and the address for service of process.
The Articles of Organization also typically contain a statement that the organizer acts on behalf of all LLC members.
Who Can Be an Organizer for an LLC?
The organizer for an LLC can be any qualified person or entity that prepares and files the Articles of Organization on behalf of the business.
When creating an LLC, the organizer can be:
- An individual or group of individuals
- LLC member
- A family member
- Business lawyers
- Your LLC's registered agent
- Business formation service
Most states require that the organizer be at least 18 years of age, a resident where they wish to form their business, and not already barred from forming an LLC by any other state.
LLC members can be their own LLC organizers, but it's unnecessary. No state law stipulates that an organizer must also be an LLC member. Regardless, some states also allow organizers to be the LLC's registered agent.
Remember that there should be at least one organizer for an LLC. Otherwise, the LLC can never file its Articles of Organization.
LLC Organizer vs. LLC Member
An LLC organizer is the person or entity who facilitates the technical formation of the business by filing legal documents with the state. This individual may or may not be an LLC member.
An LLC member holds an ownership interest in the business and shares responsibility for the company's operation and administration [1]. Unlike S corporations, LLCs can own more than 80% of another corporation and have an unlimited number of members, providing significant flexibility in ownership and operational structure, according to ScienceDirect.
A person is only allowed to be both the organizer and a member of one registered limited liability company.
This means they must choose between being the LLC organizer or its member when filing their paperwork with state authorities for multiple businesses.
Another difference is that members of an LLC are liable for company debts and obligations if they breach any terms of the LLC operating agreement.
On the other hand, LLC organizers are not required to have any financial responsibility for their company's debts or legal responsibilities according to state laws.
An LLC organizer also has no involvement in the day-to-day management decisions of an LLC, while LLC members do since they make up its governing body.
This doesn't apply to LLC organizers who are also LLC members.
The main similarity between these two titles is that their names appear on the articles of organization, but not always.
An LLC's organizer must be listed by name and state of residency since they've registered with their Secretary of State or related authority.
Members do not need to supply any personal information when filing as an LLC member and can remain anonymous.
Professional LLC Organizers
Often, LLC owners don't want the hassle of the legal paperwork, so they leave it to the professionals.
Most professional LLC organizers have legal backgrounds and are very good at what they do. They can save you money and time by handling all your paperwork correctly and promptly.
A professional LLC organizer will help you set up your company correctly, ensuring that all of the legal requirements are met.
They also offer the following additional services:
- Checking the LLC name availability before you begin the filing process
- Offering legal advice on your business structure
- Providing legal guidance
The owner of a single-member LLC is usually its own LLC organizer, too, but this can be too time-consuming and energy-draining, which is why many opt for a professional to serve as an LLC organizer.
"A skilled LCC organizer can assist in accurately filing your paperwork on the first attempt, preventing expensive errors such as rejection, and can also help save you time."
- Jon Morgan, CEO, Co-Founder & Editor-in-Chief of Venture Smarter
Related article: LLC Organizer vs. Registered Agent
FAQs
How Do I Remove an Organizer From My LLC?
To remove an organizer from your LLC, the members need to agree, amend your Articles of Organization, and file the Amendment to the Secretary of State.
What Is the Difference Between Authorized Agent and Organizer?
The main difference between an authorized agent and an organizer lies in their primary function in the LLC.
A registered agent is a person or a service designated to represent the company receive legal paperwork and perform service process.
A person who organizes an LLC will generally serve to file LLC documents during its initial creation.
What Is the Statement of the Organizer?
The Statement of the Organizer is used to list the Members or Managers of your LLC and the organizer's renunciation of their rights and duties in favor of the members.
Banks may be concerned that you are not the genuine owner if your name is not on the formation documents, which is why this statement may come in handy.
References:
- https://www.sciencedirect.com/topics/economics-econometrics-and-finance/private-limited-company
