1. Why Create a Limited Liability Company?
2. How to Create a Limited Liability Company
3. What Does the Article of Organization Include?
4. Filing Your Article of Organization

The Article of Organization for LLC is a single document you file with whichever agency handles business registrations in your state. It essentially documents what your limited liability company is and what it does.

By filing an Article of Organization document, you are letting your state know your limited liability company exists. Once you have filed your Article of Organization, the state recognizes your company as a registered business entity.

Many states require only an Article of Organization for you to create a limited liability company.

Why Create a Limited Liability Company?

There are a number of benefits to creating a limited liability company. These include:

  • Protection of members' personal assets (i.e., limited liability).
  • Members pay income tax only on the company's earnings.
  • The company has greater credibility with partners, vendors, and customers.
  • Greater flexibility with regard to management structure.

How to Create a Limited Liability Company

There are a number of steps you need to complete in order to create a limited liability company. You need to:

  • Apply for an Employer Identification Number. This enables you to open a bank account, get a business license, and file tax returns.
  • Write an Operating Agreement. The Operating Agreement is where the owners and members of the company spell out the members' rights and obligations. It also documents how the company will operate, who the members are, and how they will administer it financially.
  • Open a bank account. You can only do this once you have your Employer Identification Number and an Operating Agreement that designates who has signing authority.
  • Apply for a business license. This is usually necessary to conduct business legally in a particular jurisdiction.
  • Do business. File your annual renewal with the secretary of state to maintain your limited liability company. Also, keep your Operating Agreement up-to-date as you add members or modify the way you do business.

A critical part of creating a limited liability company is writing and filing your Article of Organization document with your state.

What Does the Article of Organization Include?

The Article of Organization document does not need to be in-depth or complex. You can find forms online to help you create your Article of Organization document fairly quickly. Use these so you do not need to create the document from scratch. Check your secretary of state's website for more information. Alternatively, you can hire a lawyer to draft your Article of Organization.

As long as your Article of Organization contains at least the following information, you should be able to file it without problem:

  • The name and address of your limited liability company.
  • The type of business, broadly speaking, in which your company engages.
  • The name and address of the agent you have authorized to handle physical documents on your behalf.
  • The current members and managers of your limited liability company.
  • The name of the person or persons who started the process of organization.

Before you file your company's Article of Organization with the state, make sure the company's organizers and managers sign it.

Filing Your Article of Organization

As soon as you have written and signed your Article of Organization, you need to file it with the appropriate state agency. This will be whichever agency deals with business registrations.

Note that the Article of Organization is different from your limited liability company's Operating Agreement. You have to file your Article of Organization, whereas you do not need to file your Operating Agreement.

Every state requires you to pay a filing fee for the Article of Organization. How much you pay depends upon the state in which you organized your company. The cost normally ranges from $100 to $200. Your state may let you file online and offer options for expedited filing.

If you file online, you will receive a confirmation notice at the email address you gave on the form. You will only receive notification when the relevant agency has approved your document. Online filings do not receive confirmations by regular mail. Should you file by regular mail, however, you will receive a confirmation notice at the mailing address you provided on the application.

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