Does an LLC Have Articles of Incorporation: Everything You Need to Know
Does an LLC have articles of incorporation that establish the business as a legal entity? Yes, an LLC must file an organizing document with a state agency.3 min read
Does an LLC have articles of incorporation that establish the business as a legal entity? Yes, an LLC must file an organizing document with a state agency. However, in the case of an LLC, the document is called the Articles of Organization, not the Articles of Incorporation. While they may share many similar features, they are not the same document, for the simple fact that an LLC is, technically and legally speaking, “formed” while a corporation is “incorporated.”
Articles of Incorporation are used by businesses that are registering with a state as a corporation, and LLCs, like corporations, are entities that provide, among other things, the benefit of protecting the personal assets of the owners of the business. LLCs also have to file an organizing document with a state to legally meet the requirements established by that state to conduct business.
Articles of Organization Explained
Most states only require that a company file Articles of Organization. It is most often a dongle document filed with a state agency (most often, but not always, the Office of the Secretary of State) that lays out the basic facts about the business, such as legal name, address, a statement of purpose, and information as to how the LLC will be managed (although this is not always necessary).
When it comes to defining your business’ purpose, there are two types of clauses used most often:
- General Clause: Some states accept language that simply states that the business has been formed to engage in “all lawful business.”
- Specific Clause: In rare instances, the state wants a more elaborate explanation of the goods or service the business will provide to consumers.
Although many states provide a form that can be filled out without employing the services of an attorney, it is always advisable to consult legal counsel experienced in the creation of LLCs. Articles of Organization do not need to be very complex, and in most cases, will be accepted as long as the minimum state requirements are met.
To save time, take these steps before filing the Articles of Organization:
- Perform a name search before settling upon a name for the LLC. It is embarrassing to learn that another LLC with the same name is already registered with the state after you’ve paid the filing fees and created web sites, signage or letterhead, and business cards. Even worse, you might liable for trademark or service mark infringement damages.
- Research the language used in the Articles of Organization filed by businesses that provide similar goods and services to help clarify the statement of purpose. It is best to give as broad an explanation as possible should the business grow into new avenues of operation.
- Hire a registered agent who has a physical presence in the state who will be authorized to accept the delivery of legal documents on your behalf.
- Identify the names of the members and, in the case of a manager-managed LLC, the managers, who will be responsible for the daily operation of the LLC.
- Review the guidelines for filing on the respective agency’s website page, because the requirements for establishing an LLC are usually established by statutes, and new provisions can be added through new laws.
Although every state may have different requirements for forming an LLC, it is usually common for one of the members to sign the document as a representative of the business. Additionally, filing fees should be paid in full at the time the Articles of Organization are submitted.
The LLC Operating Agreement
In most cases, states do not require the filing of an operating agreement along with the Articles of Organization. However, it is a very good idea for the member(s) of an LLC to create an operating agreement nonetheless. The document serves a similar purpose. It can limit misunderstandings between members as the business grows and responsibilities evolve. Think of it as a contract between the members (and in some cases managers) that clearly states roles and responsibilities.
Owners may have a variety of reasons to establish an LLC that include protection of personal assets or receiving the benefits of pass through taxation. The Articles of Organization serve as the official document approved by the state that guarantees that those reasons are honored.
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