There's a lot of confusion surrounding the process of forming an LLC.
One of the first questions everyone asks is who the organizer of an LLC can be and what that entails.
This blog post will attempt to explain who the organizer in an LLC is and the duties and responsibilities of that person.
Who Is an LLC Organizer?
A limited liability company organizer is the person who sets up the company.
This person or entity is responsible for filing all legal documents with the state and ensuring that everything meets state requirements.
The organizer also has to make sure the members have filled out their share certificates correctly, appoint a registered agent, keep meeting minutes, and keep track of who votes on what decisions at meetings.
What Does an LLC Organizer Need to Do?
An LLC organizer is a person who forms or establishes an LLC as required by state law and secures its status as a legal entity.
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.
The Articles of Organization contain basic information about the LLC, such as its business name and address, purpose or business of the company, registered agent name, and address for service of process.
The Articles of Organization also typically contain a statement that the organizer acts on behalf of all members in forming an LLC.
Who Can Be an Organizer for an LLC?
LLC organizers are people or entities that are responsible for creating an LLC.
Most states require that the organizer be at least 18 years of age, a resident in the state 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 organizer, but it's not necessary. No state law stipulates that an organizer must also be LLC members. Regardless, some states allow organizers to be the LLC's registered agent as well.
Keep in mind that there should be at least one organizer for an LLC. Otherwise, the LLC can never file their Articles of Organization.
The organizer can be an individual or group of individuals, a family member, business lawyers, your LLC's registered agent, a corporation, an association, trust, partnership, or other legal entity.
LLC Organizer vs. LLC Member
An limited liability company organizer is different from LLC members, although they can be the same person.
A person is only allowed to be both the organizer and a member of one registered limited liability company, which means they must choose between being the LLC organizer or its member when filing their paperwork with state authorities for multiple businesses.
An LLC member possesses ownership interests in the limited liability company, whereas an LLC's organizer does not have that; at least, they're not required to.
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 members do since they make up its governing body.
This doesn't apply to LLC organizers who are also members of the LLC.
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 for an LLC as a 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 of these people have a legal background and are very good at what they do--they can save you money, time, and headaches by handling all your paperwork correctly from the beginning and promptly.
This will help ensure that your LLC is set up right from day one.
A professional LLC organizer will help you set up your company correctly, ensuring that all of the legal requirements are met.
They also offer additional services, such as checking the LLC name availability before you begin the filing process, offering legal advice on your business structure, and being there to help with any future legal issues that may arise when you decide to file creation documents.
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. It's especially when they need legal or tax advice for various aspects of the company, such as the Articles of Organization.
How Do I Remove an Organizer From My LLC?
To remove an LLC organizer, you need to amend your Articles of Organization and consult your operating agreement that should specify the procedure for removing an LLC organizer.
The next step is to file the Amendment to the Secretary of State and pay the filing fees. It applies even when you run a single member LLC.
The members of the LLC need to be on the same page and agree to remove the organizer unless you have other voting procedures in your formal operating agreement.
What Is the Difference Between Authorized Agent and Organizer?
An LLC's registered agent or registered agent service can act as an LLC organizer, but they are not obligated to.
A registered agent is a designated person or a service designated to receive legal paperwork and service of process on behalf of the company.
A person who organizes an LLC will generally serve to file LLC documents during its initial creation and stay disconnected from the LLC's ongoing duties.
On the other hand, Registered agents need to stay connected to their duties related to the LLC.
Can I Be My LLC Organizer?
Yes, as long as it's stated within the Articles of Organization. One person organizes many LLCs.
Is LLC Organizer Public?
Yes. Seeing as the organizer must sign the formation documents in the initial stages of LLC setup, their name is displayed on your state’s public records.
What Is the Statement of the Organizer?
An internal document called the Organizer's Statement 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 LLC Formation Documents, which is why this statement may come in handy.
What Is an LLC Organizer...
Setting up a business entity is not complete without the business's formation documents and Articles of Organization.
To conduct business correctly, your new LLC needs to have everything in place, including the LLC organizer, who should be a person of trust or a law firm with a good reputation so that your LLC formation can be completed properly.