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Business owners, entrepreneurs, start-up founders, and more may benefit from learning about articles of organization and the process that starting an LLC (Limited Liability Company) involves.
Articles of organization lay the foundation for a successful business by outlining responsibilities, expectations, and overall company structure.
So, if you are a business professional seeking a more in-depth understanding of articles of organization documents, as well as procedural information for establishing your business, continue reading this article.
We’ll walk you through key steps to make this process easy for you.
- Articles of organization describe the portion of a legal document that provides liability information regarding an LLC.
- Articles of organization provide an opportunity for everyone involved in a business structure to talk about responsibilities and benefits.
- There are a few important aspects to a well-thought-out article of organization. As long as they’re included, they can be filed.
- There are steps you can take after you file articles of organization.
What are Articles of Organization?
Articles of organization, similar to articles of incorporation, are a section of a legal document that details the liability information, but for an LLC (limited liability corporation).
In fact, articles of organization clearly outline the rights of the corporation and its owner(s).
To learn how to file articles of organization, as well as some key information that you’ll want to include in your document, stick around until the end.
Examples of Articles of Organization
As an example, let’s say that you start a business with your best friend. Business arrangements can be tricky, especially in a legal sense, so filing articles of organization gives you both a clear understanding of liabilities.
Additionally, you’ll be forced to lay out responsibilities and profit-sharing expectations prior to opening for business.
This method ensures that everyone is treated fairly.
How to File Articles of Organization
Now that you understand the purpose of articles of organization, this section of the article will detail how you might file articles of organization:
- Visit the Secretary of State website – The Secretary of State website, found here, is operated through the United States Department of State. This website will offer information about filing articles of organization and provide you with a form to fill out.
- Gather your information – The information that you will need to supply includes (but is not limited to): LLC and owner names, LLC address, start date, and a registered agent. Fortunately, on the Secretary of State as well as the Small Business Association website, you can access a plethora of detailed pages on how to choose a business structure, how to write business documents and more.
- Answer questions – You may be asked to provide additional information, such as the purpose of establishing your LLC. Whether you are asked this question or not, it is imperative that you consider your business’s goals and objectives prior to forming an LLC.
- Submit the form – Either submit your form electronically or by mail, depending on your state’s rules for submission. It’s that easy!
Articles of Organization Requirements
To expand on the information that you need to include in your articles of organization, here is a list of each element and its purpose:
- LLC name and address – This may seem obvious, but its important to make sure that the organization that your document is referring to is clear.
- The nature of the business – Describing the nature of your organization does not have to include too many details, but it should be a synopsis of your reason for opening and your goals for the company.
- Type of corporate structure – If you’re filing articles of organization, you will need to use an LLC structure. Other corporate structures include C corporation, S corporation, sole proprietorship, and more. These other structures (beyond your standard LLC) may require articles of incorporation, or another document, to become an established entity.
- Name and address of registered agent – A registered agent is typically a legal personnel that is familiar with your business and can serve as a witness to the drafting and signing of your document.
- Names of the members, managers, and directors of the LLC – Lastly, it is wise to include all members of your organization, particularly the managers and directors, of your LLC.
You may eventually hire more people, but the main players involved in your LLC should bear witness to and be included in your articles of organization.
Articles of Organization vs. Articles of Incorporation
In the chart below we provide the major differences between articles of organization and articles of incorporation.
|Articles of Organization
|Articles of Incorporation
|File if your company has an LLC structure
|File if your company is becoming a corporation, such as a C or S corp
|Directed by shareholders
|Directed by members
As said previously, articles of organization are used to file an LLC. LLC’s typically have a simpler management structure without the complexity of shareholder interests.
5 Steps to Take After Filing
After filing your articles of organization, here are 5 steps you should take to continue setting up your business entity.
- Get an EIN number – An EIN, or employer identification number, is like a social security number for your business. If your business operates in the United States, you are eligible for this number. An EIN is useful for taxation purposes, as some businesses can gain tax benefits.
- Form an operating agreement – An operating agreement is a legal document that allows for the customization of requirements from each member of an LLC. This can cover anything from operational duties to professional expectations.
- Open a bank account – It is crucial that you open a business account that is solely used for paying business expenses. Although some people opt to use a personal account or credit card, this can become a disaster for personal credit or assets if the business does not work out.
- Get a business license – Business licenses allow companies to do more than just sell alcohol! Business licenses can enable fundraising, promotion running, and event organizing.
- File for an annual report – Filing an annual report is a requirement for all statutory business entities (such as LLCs), as it is important that the public, government, and financial institutions are aware of the status of your business.
Importantly, you will be required to generate an annual report for each state that you operate in.
You’ve made it to the end! It is terrific that you’ve taken the opportunity to learn about your business, its structure, and the importance of filing articles of organization.
If you have additional questions, consult the FAQ at the end of this article, or consider consulting an attorney to make sure that you’re completing everything correctly.
Your diligence in establishing your company will give you a great advantage as you open the doors to your business.
What does an article of organization do?
Articles of organization construct the framework for your LLC so that the financial, legal, and structural information of the company is laid out and agreed to.
How do you write articles of organization documents?
In order to write an effective articles of organization document, you will need to include the name of your LLC and all of its members, the address of your LLC, the intentions of the LLC, your expected duration of operation (even if indefinite), and the name/address of your registered agent.
What are articles of organization for an LLC?
Articles of organization is a legal document that establishes your business as a limited liability company, or LLC.
It is legally binding and protects all members involved in the company.
Do I need an attorney to file articles of organization?
You do not need an attorney to file, but if you have specific questions about filing, you may want to consult a legal professional.