What are the Articles of Organization?
The Articles of Organization is a public document used to form a limited liability company (LLC).
Sometimes known as the Certificate of Organization or Certificate of Formation, the document outlines the important details of your LLC and establishes your business as a registered entity in your state of formation.
Preparing To File Your Company’s Articles Of Organization
The specific requirements for articles of organization vary from state to state, but all states will generally require the following information.
- The Company Name: Be sure the company name you choose is not already taken. Most states require you to include LLC at the end of your business name. Be careful not to include words reserved for certain regulated industries such as “bank” or “insurance.”
- A Business Address: A street address for the LLC’s principal place of business is required. P.O. Box addresses are not permitted.
- The Company’s Purpose: For some states, a broad general statement such as, “to engage in lawful activity,” will suffice. Others require a more specific statement regarding what the LLC will do. As your business grows, you may choose to file an amendment to change the purpose of the LLC’s business, but this is not necessary. LLC’s offer a good deal of flexibility and can be used for one or more purposes.
- A Registered Agent: A registered agent is someone who has agreed to accept service of lawsuits and other official documents on behalf of your company. All fifty states require registered business entities to obtain a registered agent. While it’s possible to serve as your own registered agent, hiring a professional service is advisable.
- Other Members’ Names: Each member of an LLC is an owner of the company and must be listed in the articles or organization.
- An Effective Start Date: The effective start date of your LLC is usually the day it is approved by your state. However, you can also choose to delay your effective start date up to 90 days from the day your articles are approved. Florida is the only state that allows an LLC to backdate its effective start date by up to five days.
- Duration of Formation: LLC’s can be perpetual or indefinite. Perpetual LLC’s exist for an unlimited duration. Indefinite LLC’s exist until a particular event or date occurs. If you choose to form an indefinite LLC you must designate the dissolution date on the articles of organization.
Filing And Fees
Each state charges a one-time fee when you file your articles of organization. After that, there may be regular reporting requirements and an annual or biennial fee depending on your state of formation. This ongoing mandatory fee keeps your business in compliance and good standing.
Below is a list of each state’s fees. They are subject to change, so be sure to check with your state when you form your LLC.
Could My LLC Be Rejected?
Your state may fail to approve the formation of your LLC for a variety of reasons. The most common reason is when you have chosen a company name that is not available. Some other reasons include:
- Errors in your paperwork
- Incomplete or illegible forms
- Failure to pay required fees
When Is My LLC Official?
Once the Articles of Organization are approved and filed, the LLC becomes an official business entity.
Have a professional service form your LLC
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What To Do Once You File Your Articles Of Organization
While you wait for your state to approve your articles of organization, there are a few things you can do to continue to prepare your business.
- Create an LLC Operating Agreement. While this is not required by any state, it is an important legal contract that lays out the operations of your business in more detail than your articles of organization. It will contain information about the rights and responsibilities of each business owner, the amount of money or assets contributed by each owner, and voting and buy-out procedures.
- Apply for an EIN (if needed). This is only needed if you will have employees or if your LLC has more than one member. Single-member LLCs are not required to have EINs.
- Separate Business Finances. You can do this by opening a business checking account and business credit card.
- Comply with Annual Filing Fees. Familiarize yourself with all reporting and filing fees ahead of time so you will not be taken by surprise down the road.
- Business Licenses. Make sure you obtain any business license required by your state.