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LEGAL DICTIONARY

Articles of Organization

What are Articles of Organization?

In order to establish a limited liability company (LLC), you need to file legal documents with your state. An LLC's articles of organization contain basic information about the organization and establish the rights, duties, powers, liabilities, and obligations of each member of the LLC.

Filing requirements can vary from state to state. Most states have a form you can use to file your articles of organization, which may also be called "articles of formation" or "certificates of formation."

Why Are Articles of Organization necessary?

There are several important benefits of an LLC for its members. For example, an LLC has its own legal identity separate from that of its owners. That means owners are not held personally accountable for the actions or debts of the company. An LLC also offers tax advantages.

However, an LLC does not legally exist until the state approves its articles of organization, making them an essential part of the formation of any LLC.

What Information Is Included in Articles of Organization?

Many states allow you to complete this essential paperwork online. You can also download and complete the forms before mailing them or bringing them to your secretary of state's office. Your form will include a state statute number.

States vary in what they require, but here is a list of information that states typically require in articles of organization.

  • Name of the LLC: You should make sure you use a name that is not already in use in your state. Check to see if your state has any other rules for naming your LLC.
  • LLC's business address: Many states require your LLC to have an in-state street address.
  • Business mailing address: Include this information if your mailing address differs from the street address you provide.
  • Statement of purpose: In many states, this statement can have broad wording, such as "any and all business purposes for which an LLC may be organized."
  • Members' names: All states require the names of the members, while some states also require their physical addresses.
  • Effective date: Here is when you specify the date (now or in the future) when you want the LLC to be established.
  • Registered agent: Most states require you to list the name and physical address of the registered agent, or the person who receives legal documents on behalf of your company.
  • LLC duration: Will your LLC be perpetual or indefinite? A perpetual LLC exists without expiration until it is dissolved, while an indefinite LLC has a dissolution date that you need to state in the articles of organization.

FAQs About Articles of Organization

  • What is the difference between an LLC's articles of organization and an operating agreement?

    In order for an LLC to exist legally, you must file articles of organization with your state. This information then becomes part of the public record.

    An LLC operating agreement is an internal document that is not filed with the state or any governing body. It offers more specific details on how the LLC will operate and how it will be managed.

  • What is the difference between articles of organization and articles of incorporation?

    These documents have a similar purpose but have one main difference – the type of business structure. Articles of incorporation are for companies forming a corporation, while articles of organization are for LLCs.

  • Do I need an attorney to file articles of organization?

    No. You can file articles of organization on your own without the assistance of an attorney.

  • Do I need to register the name of my LLC separately?

    No. Registering your LLC with articles of organization also registers your business name.

  • Can the state reject my articles of organization?

    Yes. Your state can reject the new business for various reasons, including not paying the filing fee, making errors in completing the form or using an unavailable business name.

  • What happens next?

    After you file the articles of organization, the state reviews them. If the state gives its approval, it will issue a certificate of formation. You use this document to obtain an Employer Identification Number (EIN) from the IRS and to open a business bank account.

What are Articles of Organization?

In order to establish a limited liability company (LLC), you need to file legal documents with your state. An LLC's articles of organization contain basic information about the organization and establish the rights, duties, powers, liabilities, and obligations of each member of the LLC.

Filing requirements can vary from state to state. Most states have a form you can use to file your articles of organization, which may also be called "articles of formation" or "certificates of formation."

Why Are Articles of Organization necessary?

There are several important benefits of an LLC for its members. For example, an LLC has its own legal identity separate from that of its owners. That means owners are not held personally accountable for the actions or debts of the company. An LLC also offers tax advantages.

However, an LLC does not legally exist until the state approves its articles of organization, making them an essential part of the formation of any LLC.

What Information Is Included in Articles of Organization?

Many states allow you to complete this essential paperwork online. You can also download and complete the forms before mailing them or bringing them to your secretary of state's office. Your form will include a state statute number.

States vary in what they require, but here is a list of information that states typically require in articles of organization.

  • Name of the LLC: You should make sure you use a name that is not already in use in your state. Check to see if your state has any other rules for naming your LLC.
  • LLC's business address: Many states require your LLC to have an in-state street address.
  • Business mailing address: Include this information if your mailing address differs from the street address you provide.
  • Statement of purpose: In many states, this statement can have broad wording, such as "any and all business purposes for which an LLC may be organized."
  • Members' names: All states require the names of the members, while some states also require their physical addresses.
  • Effective date: Here is when you specify the date (now or in the future) when you want the LLC to be established.
  • Registered agent: Most states require you to list the name and physical address of the registered agent, or the person who receives legal documents on behalf of your company.
  • LLC duration: Will your LLC be perpetual or indefinite? A perpetual LLC exists without expiration until it is dissolved, while an indefinite LLC has a dissolution date that you need to state in the articles of organization.

FAQs About Articles of Organization

  • What is the difference between an LLC's articles of organization and an operating agreement?

    In order for an LLC to exist legally, you must file articles of organization with your state. This information then becomes part of the public record.

    An LLC operating agreement is an internal document that is not filed with the state or any governing body. It offers more specific details on how the LLC will operate and how it will be managed.

  • What is the difference between articles of organization and articles of incorporation?

    These documents have a similar purpose but have one main difference – the type of business structure. Articles of incorporation are for companies forming a corporation, while articles of organization are for LLCs.

  • Do I need an attorney to file articles of organization?

    No. You can file articles of organization on your own without the assistance of an attorney.

  • Do I need to register the name of my LLC separately?

    No. Registering your LLC with articles of organization also registers your business name.

  • Can the state reject my articles of organization?

    Yes. Your state can reject the new business for various reasons, including not paying the filing fee, making errors in completing the form or using an unavailable business name.

  • What happens next?

    After you file the articles of organization, the state reviews them. If the state gives its approval, it will issue a certificate of formation. You use this document to obtain an Employer Identification Number (EIN) from the IRS and to open a business bank account.