What are Articles of Organization?

October 31, 2020
Business Basics
Entrepreneurship
What are Articles of Organization?

When forming and registering a business, you must decide what type of business entity to become. If you are forming a corporation, for example, you will be required to file articles of incorporation with the Secretary of State or the agency that handles such matters in your state. But, is the same true when forming a limited liability company (LLC)? LLCs are not required to submit articles of incorporation. They are, however, required to submit a document referred to as articles of organization. So, what are articles of organization, why do you need them, and what is required to fill them out? Most LLCs need articles of organization but what is included in them and how you submit them will vary from state to state.

What are Articles of Organization?

Articles of organization are formal legal documents used to establish an LLC at the state level. These articles determine the rights, powers, duties, liabilities, and obligations of each member of an LLC and of the LLC to its members. These articles are similar to articles of incorporation and may be referred to as a “certificate of organization” or a “certificate of formation.” Depending on the needs and wishes of the LLC, these articles can be extremely simple or rather complex. In the long-run, it is better to go above and beyond what you think should be included in the articles of organization so that the power structure of your business is more clear.Simple articles of organization can often be filed online whereas more complicated articles are most often drafted by an attorney. For example, in New York State, there is a fill-in-the-blank, two-page form that is available online. For most, a document like this will cover the basics and satisfy organizational needs. More complex articles will cover things beyond the LLC formation like how and when to distribute profits, name managing members, identify officers, and detail voting procedures.

What is Required for Articles of Organization?

When filing articles of organization, you will be required to provide basic information about your LLC. This information includes:

  • Name of the LLC: The name of the LLC must be unique to the jurisdiction
  • Address of the LLC: LLCs must have a valid address in the state they are filing in. If the business does not have a physical location, using a virtual office service can resolve this issue.
  • The Nature of the Business: to provide greater flexibility, some LLCs simply state “to engage in lawful activity” as their purpose.
  • The name and address of the LLC’s Registered Agent: A registered agent is a person or business authorized to accept legal documents on behalf of the LLC.
  • The names of managers, members, and directors of the LLC.

When drafting articles of organization, many LLCs will also draft an operating agreement. Articles of organization establish ownership, rights and responsibilities, the share of profits or losses, and what happens if a member leaves the LLC, whereas an operating agreement establishes the structure for day to day operations. Some states require LLCs to create an operating agreement and file it with the Secretary of State. Other states require that the document be created but they might not require the agreement to be filed. Some states do not require one at all. When it comes to filing all the necessary paperwork for the formation of your LLC, it might be a good idea to seek outside help. Not only can a registered agent receive legal documents on your behalf, but they can also help you fill out the requisite paperwork and submit it for you. Hiring a registered agent means you’ll never miss any required documents, fees, or refiling deadlines.

Do I Need Articles of Organization for an LLC?

The simple answer is that yes, every LLC will be required to complete articles of organization to legally do business. The state in which that business operates may require certain details whereas others may leave these details out. So be sure to check with your state prior to completing these forms.You might need to submit this paperwork at the time of registering as an LLC. If you have been operating as self-employed or in a partnership and have recently shifted to an LLC formation, be sure to get your paperwork in as soon as you can as most states have a limited time period for registering.

Completing Articles of Organization for Your LLC

The filing requirements for articles of organization may vary from state to state but no matter where in the United States you operate, forming an LLC requires this documentation. You may be able to access a form through your state website or in-person. Submit the documents in whichever way the state accepts registered business paperwork. This document is important as it will establish the powers, rights, duties, and liabilities of each member, helping to establish your business structure. It is important that this document lays out the powers, rights, and responsibilities of members involved with the business for legal and tax purposes. Once the articles of organization are approved, your LLC will be a legally registered business at the state level!  Be sure to adjust the articles of organization if any changes are made to your business and then formally file the adjustments. For example, if a business owner dies, you may need to resubmit this paperwork. Additionally, if your LLC files a DBA (or Doing Business As), you may need to stipulate that in your articles of organization. Completing and filing your articles of organization is relatively easy but sometimes, as a business owner, it can be time-consuming to do. You can always hire a registered agent service to file this paperwork on your behalf and as a way of expediting this process.

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LLC|Articles of Organziation|Formation|Certificate of Formation
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