Articles Of Organization

What are articles of organization?

Articles of organization, sometimes called certificates of organization or certificates of formation, are the document by which limited liability companies ("LLCs") are established. The document organizes the structure and basic information of the LLC. This document alerts the state to the fact that a business is opening and will be operating there. It also gives the state government a way to contact the LLC when necessary and ensures that they have information about what parties are liable in case something goes wrong.

A Limited Liability Company, commonly referred to as an LLC, is a business designation that relieves its owners of personal responsibility for their company's debts or liabilities. Instead, the responsibility falls on the LLC, meaning the company is its own legal entity. In the event of a bankruptcy or legal dispute involving the business, LLCs protect owners' personal assets like bank accounts, homes, and cars. For this reason, it is the preferred form of a business for most solo entrepreneurs and small- to medium-sized businesses.

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

Though both documents are involved in the creation of a new LLC, they serve different purposes and include different information. The articles of organization are the main formation document for the LLC. This is the document that is filed with the local Secretary of State and is meant to alert the state to the fact that a new business is opening and operating there. The main purpose of the articles of organization is so that the state knows how to contact the LLC when needed and to ensure that they have information about what parties are liable in case something goes wrong.

An operating agreement is a much more robust document that is also created when the LLC begins. Its primary purpose is internal, unlike the articles of organization whose primary purpose is to provide information to external parties. The operating agreement is the main governing document for how the LLC will run. It does not need to be filed with the Secretary of State and is generally only used by the members of the LLC.

Is it mandatory to have articles of organization?

Yes, it is mandatory for all LLCs to have articles of organization created and filed with the Secretary of State before they begin operation.

What is a "member"?

In the context of an LLC, a member is a person or legal entity who owns some or all of the interest in an LLC. They are the owner, but they do not necessarily have to participate in the management of the company, depending on how the LLC is set up. This person might also be referred to as a shareholder.

What is a "registered agent"?

The registered agent is the person or business that receives legal notices and official documents on behalf of the LLC. If the registered agent is a business, it must be located in the same state as the business for which it serves as a registered agent.

What is a "principal office"?

The principal office is the primary location where the business will operate. This may also be referred to as the headquarters of the business.

What must articles of organization contain?

Valid articles of organization must include at least the following mandatory sections:

• Identifying information for the LLC: The articles of organization must include identifying information for the LLC, including the name and address of the principal office of the LLC.
• Start date: The articles of organization specify the date when the LLC will start doing business.
• Registered agent: The articles of organization include the name, address, and contact information of the person or business who will be serving as the registered agent for the LLC.
• Purpose: The articles of organization describe the purpose of the LLC. This is especially important for businesses that involve licensed professionals, such as doctors or lawyers.
• Management structure: The articles of organization outline the management structure of the LLC. They name anyone members who will be designated as managers of the LLC, as well as all other members with an ownership share in the business.
• Duration: The articles of organization specify how long the LLC plans to be in duration, whether that be for a specific amount of time or indefinitely.

What are the prerequisites of articles of organization?

To establish an LLC, the members must first research and select the name they would like to use for the business. In most states, this name will have to fulfill certain requirements. These are the most common requirements that must be met:

• The name of the LLC must be original. It can't be the same as the name of any other LLC registered in the state. Usually, the Secretary of State's website will have a feature that allows a search for currently registered LLCs.
• The name must end with a designator, like LLC or Limited Liability Company, to emphasize that it is an LLC.
• The name will have to conform to the state's requirements for permitted words. Many states don't allow certain words such as "insurance" in the names of any LLC unless it meets certain conditions.
• The LLC's name must not infringe on any other party's intellectual property rights. For example, even if there were no other LLCs in the state named McDonald's and someone is opening a business selling hamburgers, they would not be able to call their LLC McDonald's because it would be infringing on the trademark of the existing business.

The LLC should also obtain any business licenses or permits that are necessary to legally do business in the state. This is often a requirement for particular sorts of businesses, such as medical or legal offices.

The LLC should designate a registered agent, also known as a statutory agent. This is the person or business who will receive legal documents and other correspondence on behalf of the business. The agent must have a physical address in the same state where the business is being formed.

Who is involved in articles of organization?

Articles of organization involve the organizers, members, and managers of the LLC. Organizers are individuals or businesses who are responsible for drafting and filing the paperwork to create the LLC. The managers are the individuals or businesses who are responsible for the day-to-day operations of the LLC. Members are the individuals or businesses who own the LLC.

The requirements for all three of these categories of involved entities are the same. If these are people, they must be of legal adult age, usually at least 18 years old, in the state where the business is being established. They must also be of sound mind and have the mental capacity to enter into contracts. In some states, people who have been convicted of certain crimes may be disqualified from entering into an LLC. If these are business entities, they must be full authorized to enter into the LLC under their own government documents and applicable law.

What can the duration of articles of organization be?

There is no limit to the duration of articles of organization. The LLC can be created for a specific period of time, or it may run indefinitely.

What has to be done once the articles of organization are finished?

Once the articles of organization have been written, they must be signed and dated by anyone who served as an organizer for the LLC. The organizer is the person or entity who prepared the paperwork to create the LLC.

Is it necessary to notarize articles of organization for it to be valid?

The notarization requirements for articles of organization vary from state to state. However, most states do not require that articles of organization be notarized. The main exception is the state of Louisiana, which does require the notarization of articles of organization for LLCs created in their state. The state business filing office or Secretary of State usually has additional information about any notarization requirements.

Is it necessary to register the articles of organization?

Yes, once articles of organization are done, they should be filed with the state where the LLC is being established. All states require new LLCs to file their articles of organization, typically with an associate filing fee that varies from state to state. The articles of organization are usually filed as a public document so that anyone can go search up the business to see the articles. The Secretary of State's website has further information about the filing process and which fees must be paid.

Which laws are applicable to articles of organization?

Articles of organization are subject to the laws of individual states. There is no one federal law covering these documents because each individual state governs the businesses formed within that state.

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