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.
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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.
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.
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:
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.
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.
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.
|Articles of Organization Features||Operating Agreement Features|
|Must-have instrument for any LLC||Optional instrument in most states (required only in New York, Missouri, Maine, California, and Delaware)|
|Formation document||Operational tool|
|Should match a stipulated form||Can be compiled in a free form|
|Requires state registration||Agreed internally, no state filing required|
|LLC’s flagman doc||Company bylaw|
|Formal and basic by nature||Detailed and customizable|
|Brings an LLC to existence||Outlines LLC operation and management principles|
|Enforces major LLC benefits such as personal asset protections and adaptive taxation||Has a priority over generic default laws so that you could run business your way|
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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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:
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:
Today, filing LLC statutes is as easy as never before and state agencies offer different filing methods:
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.
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:
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.
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.
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.
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.
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.