Articles of Organization: Everything You Should Be Aware Of

Are you going to start a private business in the US under the umbrella of the limited liability company structure? If so, you’ve come to the right place. An LLC is an entity that requires state registration. And creating an LLC is as simple as filing the Articles of Organization with the state.

Below, we’ve made a detailed guide explaining what an LLC statute is, why you need it, how to compile the document, and how to register it. As you finish reading, you’ll get a complete understanding of how to file the Articles of Organization when forming an LLC in any of the US states.

What Are Articles of Organization?

The Articles of Organization are your main LLC formation document that brings your LLC into existence as a legal entity. It’s also called a Certificate of Organization or Certificate of Formation in some states.

Without a statute, your LLC is not legitimate. The document functions as an LLC passport confirming the entity’s compliance with appropriate state regulations, enforcing its rights, powers, and commitments as an independent legal person, and activating its crucial characteristics such as liability shield and flexible taxation.

LLC Articles of Organization Content

Despite the importance of the function it performs, the LLC statute is a simple generic document enlisting basic company info that will be further entered into the state registries and business databases as required by law.

LLCs are established and operate under state regulations, hence, the Articles of Organization requirements are state-specific as well. Since the document is to be registered by the Secretary of State, you can find particular LLC statute requirements on the website of your formation state regulator.

Info to Be Covered

At the same time, though, the Articles of Organization LLC have a standardized form that is quite similar across the states and usually covers the following data:

• LLC name: Unlike unincorporated entities, LLCs are not automatically named after their owners. You should create a moniker for your future business entity and, what is more important, make sure this name is available in your formation state and you can use it. Statutes containing inappropriate company names will be rejected by the state regulator and the state fees are non-refundable. Each state has certain business naming rules outlining must-haves and restrictions in relation to business names. Besides, state government websites normally have business name search tools to check the name availability for free;
• LLC address: To register a company, you should select a physical address, P.O. boxes are not allowed. You can choose your home or office address or even use the registered agent’s address for that purpose. Rental mailboxes and virtual offices will also do since they have real street addresses;
• Registered agent info: LLC law calls for the entities to have a registered agent meant to receive business mail and service of process on behalf of the company. As such, the agent serves as a point of contact between an LLC and state, governmental, or public authorities, agencies, and organizations. By handling your mail and keeping an eye on your essential documents, an agent works as a guarantor of your LLC’s compliance status. For this role, you can appoint any individual over 18 years of age or a legal entity having a registered address in your formation state. You can also perform this function on your own or entrust it to a dedicated agent service. Whatever your choice, your LLC statute should contain the agent's full name, street address, and phone or email if required;
• LLC management type: Some states require stating if your LLC will be managed by a third-party manager or one of the company members. You might be also required to attach a list of the LLC officers and members to the statute;
• LLC dissolution date: This point is also optional since LLCs are perpetual by default. Yet, if you form a legal entity for some specific purpose and need it to stay active for a certain period of time, you can put a dissolution date in the statute when your entity will be closed.

Articles of Organization LLC vs Other Documents

There are a few more documents you might come across when getting prepared to file your LLC. Often used in association with the Articles of Organization, those instruments are not similar to the LLC statute, have different functions, and can’t replace it.

LLC Statute vs Certificate of Good Standing

To make it clear, the Articles of Organization are your core LLC document. It’s a sort of your company identity card that makes it existent as a legal entity and verifies its eligibility.

A Certificate of Good standing, on the other hand, is a supplementary document that confirms your company’s compliance with compulsory state requirements. Also issued by the state office, the certificate of good standing is normally provided under demand. You might need it when applying for business credit, loan, or factoring program or when getting a foreign qualification in a state outside your formation jurisdiction to expand your business activity.

LLC Statute vs Operating Agreement

Many first-time filers think that an Operating Agreement is a more detailed version of the LLC statute. Yet, those are two separate LLC instruments and they are not interchangeable. To give you a better understanding of how they stack up, we’ve made a side-by-side comparison.

Filing Articles of Organization: Step-by-Step Instructions

The Articles of Organization are filed at a state level, normally, with the Secretary of State’s office. While each state might have certain filing nuances and peculiarities such as the need to notarize the signed statute or some additional documents to be attached, overall, the filing procedure is similar across the US.

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Find the Appropriate State Regulator Website

LLC formation requirements vary by state. And so do the Articles of Organization forms. To rest assured you follow the right formation procedure valid in your chosen state and use the right statute form, visit the appropriate state agency website to check for the following aspects there:

• LLC statute downloadable template or digital form;
• Filings methods and if the online application is available;
• Filing fee - each state has a registration fee you should pay to get your LLC statute reviewed and approved by the state and your business profile appear in public records. Similar to LLC regulations, filing fees range by state. Some states come up with lower rates ($40 to $60) while others have high charges ($300 to $500). An average registration rate is about $100- $120.

Prepare the Necessary Info

Once you’ve found the necessary website, pinpointed the right statute form, and are ready to file, make sure you are duly prepared and have the required info at hand:

• You’ve picked a name for your LLC and got it checked. Many state agency websites have a free name search tool that will enable you to check the name availability and compliance with naming regulations right before filing. This will help avoid filing application denials and waisted filing fee payments;
• You’ve designated a registered agent for your future company and got their consent statement to fulfill this function. Written consent is needed to let the regulator further enter your agent’s data into state registries;
• LLC purpose is a compulsory statute clause in many states. Unless you set up a professional LLC, you can simply state that your future business activities will be in full compliance with the state regulations and will by no means breach any current business laws. In the meantime, the purpose of a professional LLC is limited by a specific type of activity or practice;
• There are states that call for LLCs to provide a list of initial company members and make it a supplement to the LLC statute. The law doesn’t limit the number of LLC members, yet, the regulator might require that you enlist decision-makers;
• The Articles of Organization are to be signed before filing. Notably, it’s enough that a single person signs a statute. It’s an LLC organizer that could be one of the company members or managers or a third party such as your attorney or registered agent. In other words, it’s anyone who handled the filing process.

File Your Formation Application

Today, filing LLC statutes is as easy as never before and state agencies offer different filing methods:

1. You can file online by completing an online statute form and paying the filing fee at the final stage. This is the quickest and most convenient filing method. Online applications are the first to be reviewed and are usually the most affordable ones;
2. You can fill out a printed statute form and send it to the state regulator’s office along with a filing fee payment check via mail. However, get ready to wait for approval for about a few weeks and pay a bit more since the fee will also cover return mailing costs;
3. Many state agencies also allow for walk-in filings when you can bring your documents to the state office in person. The biggest plus of this method is that most often than not, you’ll be able to get approved documents back in about an hour or so.  For the sake of truth, though, it should be mentioned that online filings also offer same-day or even immediate approvals pretty often.

What’s Next: Immediate Post-Formation Steps to Take

You’ve got your LLC statute registered with the state. Your LLC is officially formed and is an independent legal person. What’s next? In fact, the formal part is not over yet since there are a few other important actions to take and aspects to cover to create a solid legal base for further business operation and prospective growth.

Write Down an Operating Agreement

As stated above, an Operating Agreement is an internal LLC document that supplements the Articles of Organization and is optional in most US states. Yet, it doesn’t mean that you shouldn’t draft it. Vice versa, it’s strongly recommended that you have one for your LLC. Here is why:

• By outlining the main LLC operating principles and procedures, stipulating the rules for profit distribution, and defining the powers, responsibilities, and commitments of the company managers and owners, the document will ensure smoother and more efficient ongoing business operation while preventing any disputes and disagreements between the LLC members as regards of the decisions made or spheres of control;
• This company bylaw will further enforce the corporate veil protections and demonstrate to your potential partners, investors, or vendors that you take it seriously;
• The document has a priority over default state laws when it comes to business governance. This fact is accepted by the courts and ensures more flexibility and freedom in customizing management rules to your individual business situation.

Obtain an EIN

An Employer Identification Number or Federal Tax ID is issued by the Internal Revenue Service for free. You can apply for it online and receive it nearly in an instant, so, getting the number won’t be a problem.

While not a requirement for single-member LLCs, an EIN is a must for multi-member LLCs. Why you might need it anyway? Defining your LLC as a taxpayer, an EIN enables the company to hire employees, open a business bank account, choose a corporate tax status, get business insurance, pay certain taxes, and more.

Set up a Business Checking Account

By opening a separate bank account for your newly-formed business, you’ll split your personal and company assets from the very start, which is essential for maintaining your liability protections ensured by LLC.

Besides, a dedicated bank account makes accounting easier and eliminates the risk of bookkeeping mistakes. And it’s required when applying for business credit and loans or engaging third-party investors and sponsors.

Register for Business Licenses

Licensing is a complex and tricky issue for all beginner entrepreneurs and many experienced businessmen alike. Most businesses need more than one LLC license or permit to stay legitimate. You should contact the Department of Revenue and your county office to find out what licensing requirements your LLC is exposed to.

• Some states have a general license requirement for all LLCs, i.e. you can’t run business within their territories unless you have this license;
• To maintain professional activities and practices, you should first get a professional or occupational license for your entity;
• Companies involved in commerce should get sales permits along with specific licenses to distribute certain types of products or services.

Consider Reporting Requirements

Nearly all US states have some sort of reporting requirements for LLCs. In most of them, you’ll have to submit annual or biennial reports along with reporting fees to the Secretary of State. Meanwhile, there are a few states that have no annual reports in place yet impose annual or franchise taxes.

Whatever the case, you should catch up with those requirements to stay compliant with the state and avoid the risk of penalties or even involuntary dissolution.

Articles of Organization LLC Templates and Examples

Though the LLC statutes are rather generic by nature and cover pretty much the same info across the states, check the drop-down list below to find the appropriate template and ready sample Articles of Organization for your formation state.

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