Key takeaways
- Articles of Organization are filed with a state to legally form an LLC
- Required information varies by state but at the very least the LLC’s name, principal office address, and registered agent’s name and address must be set forth.
- Follow the filing state’s law, rules, and regulations to make sure the Articles of Organization will not be rejected
- Steps to take after formation include obtaining an EIN, bank account, and business licenses.
What are Articles of Organization?
For an LLC to be legally formed, a document must be filed with the Secretary of State (or equivalent state business filing office). The owners of the LLC (called members) can choose any state to form their LLC, but usually they’ll form it in the state where the business is principally located. In many states, the document that forms the LLC is called Articles of Organization. However, there are states where the LLC formation document has another name – such as a Certificate of Organization or Certificate of Formation. (For the purposes of this article we will use the term “Articles of Organization” to refer to the document filed to form an LLC regardless of the name used in a particular state.)
Once the Articles of Organization have been filed with the state, the LLC’s existence as a registered business entity begins. An LLC must then abide by the laws of the state in which it was created (which is called the LLC’s “home” or “domestic” state).
What information is required?
The contents of the Articles of Organization vary by state. Typically, however, you must provide the following:
- Company name: This is the legal name of your LLC. Note: States have very specific requirements about LLC names which you must comply with. Noncompliant names could result in a state rejecting your Articles of Organization.
- Principal office address: This is the address of the principal place of your LLC’s business operations and management.
- Name and address of registered agent: The registered agent is an individual or business entity (other than the LLC itself) authorized to receive important documents on the LLC’s behalf. These include notices from state agencies and annual report forms, as well as important and time sensitive court documents such the summons that provides notice of a lawsuit being filed against the LLC, subpoenas, garnishments, and other court orders. (Many LLCs use a professional registered agent because of the importance of this role and serious consequences of failing to respond to the documents served on the registered agent.)
- Business purpose: This is required in some, but not all states. Where required, include an overview of your LLC’s business activities. Some states may also require you to provide your LLC’s North American Industry Classification System (NAICS) code. You can find your code on the U.S. Census Bureau’s website.
- Management: Some states require an LLC to indicate whether it will be member-managed or manager-managed. (If you want your LLC to be manager-managed you may be required by the state’s LLC law to indicate that in the Articles of Organization, and if you don’t, your LLC will be considered member-managed)
- Duration: This may be asked, but it’s unlikely that you will need to be specific. You should be able to state that the duration of the LLC is “perpetual.”
- Authorized signature: In general, the states ask for the signature of the “organizer”. In some states, however, a member of the LLC will need to sign and date the Articles of Organization.
How to file the Articles of Organization
In most states, you file the Articles of Organization with the Secretary of State’s office. The steps for filing vary by state but typically involve the following:
- Obtain filing instructions: These can be found on the Secretary of State’s website (or the equivalent agency in charge of entity filings).
- Complete the Articles of Organization: Complete the articles and have them executed by the authorized party. If you plan to file online, be sure to have all your information on hand before starting the filing process.
- Submit the form: You must also pay a filing fee.
In addition to filing with the state filing office, some states require that you also file at the county level. You may also be required to publish the formation of the LLC in a local newspaper.
You may want to use a corporate service provider to assist you in forming your LLC. They are familiar with the different state laws, rules, and agency practices, and can relieve you of one of the burdens of starting your business.
Steps to take after filing Articles of Organization
Once the Articles of Organization have been filed with the state, the state will provide you with evidence that your LLC has been formed. The form of this evidence varies by state. Regardless, review this evidence closely to ensure the information is accurate and keep it safe – you will need it to open a business bank account, obtain an EIN, and more.
In addition, there are several steps you will need to complete after your LLC’s approval by the state, including:
- Obtain an EIN (Employer Identification Number)- All LLCs (except single member LLCs disregarded for income tax purposes that have no employees) are required by the federal tax law to obtain an EIN. However, even if not required, it is highly recommended the LLC obtain an EIN. EINs are obtained from the IRS.
- Create an LLC operating agreement – Whether or not required by the LLC law, every LLC should have a written operating agreement. Even LLCs with only one member should have one for, among other reasons, it shows the member understands that the LLC has its own separate existence and the operating agreement can establish what happens if the member dies or becomes incapacitated.
- Register with the state’s Department of Revenue
- Open a business bank account – An LLC should always have its own bank account. The assets of the LLC and its members should always be kept separate. If the LLC is ever sued, the commingling of the LLC’s and members’ assets could lead to the members being personally liable for the LLC’s debt to its creditor.
- Obtain business licenses and permits
- Obtain any legally required insurance
- Register your DBA – If your LLC will conduct business under a name other than the name on its Articles of Organization, most states require you to register that name.
- If necessary, register to do business in other states – This is required if the LLC will transact business in states other than its home or domestic state.
For more information, read 7 things you should do after you form an LLC.
Frequently asked questions for Articles of Organization
What are Articles of Organization vs. Articles of Incorporation?
Articles of Organization is the document used to form an LLC, whereas Articles of Incorporation is used to form a corporation.
Although LLCs are often referred to as “incorporated” businesses, that is technically incorrect. An LLC is a “formed” or “organized” business entity. The terms “incorporation” and “Articles of Incorporation” apply only to a corporation.
What are Articles of Organization vs. an operating agreement?
As mentioned above, Articles of Organization is the document filed to form an LLC with the state. However, an LLC operating agreement establishes the rules and structure for the LLC. It’s an important document that guides business decisions, establishes the rights and responsibilities of the members, and helps address issues that arise while conducting business. (Internal conflicts that arise that are not dealt with in the operating agreement often have to be resolved through costly litigation).
Once signed, the operating agreement is a binding contract between the members of the LLC and between the members and the LLC entity itself.
Unlike Articles of Organization, which is a public document filed with the state, the operating agreement is not public or filed with the state.
What are some reasons my Articles of Organization may be rejected?
An LLC’s Articles of Organization may be rejected for various reasons. They include the following:
- Incomplete forms: A failure to include all the required information can lead to a rejection of your filing.
- Name is not available: In most states, your LLC’s name must be “distinguishable on the records of the Secretary of State”. So, if another LLC or other business entity has already been formed or registered with that name, or has reserved it, you’ll have to choose another name for your LLC. In some states, the name of your LLC must not be “deceptively similar” to other names. In these states, your filing may be rejected if your chosen name is too similar to another name, even if it is not an exact match. It’s advisable to check the records of the Secretary of State before filing your Articles of Organization to make sure the name you want is available. You can also reserve an available name if you aren’t ready to file your Articles of Organization just yet. For more information, see How to register a business name for your LLC.
- Name is noncompliant: In most states, your company name must contain words, phrases, or abbreviations such as "limited liability company" or "LLC" that indicate that it’s an LLC. Furthermore, states may prohibit the use of specific words or phrases or may require approval from other state agencies before filing Articles of Organization.
- Name is not consistent: You may be required to enter the name of your LLC several times on the form. You must be sure to use the same name everywhere.
- File using the incorrect method: Each state has its own rules regarding how you can file LLC documents. Some states give you a variety of choices and may allow you to file in person, by mail, fax, or online. Other states are much more restrictive. Several states only accept documents filed online and reject paper filings.
- Documents are illegible: All paper filings and signatures should be typewritten or written in black ink on white paper. If possible, better not to use dark paper, small or light type, or condensed fonts, for example.
- Failure to include the filing fee: Be sure to include the correct payment or payment information.
Where can I get an Articles of Organization sample?
Most states provide forms for filing, however, you can also view sample Articles of Organization here.
How can I obtain a certified copy of the Articles of Organization for my LLC?
Obtaining an official copy of any state-filed document, such as Articles of Organization, Certificates of Amendment, etc., requires a request to the Secretary of State, usually by mail, fax, or online.
You can also use a compliance specialist to help you obtain official copies of state-filed documents.