LLC Certification: Everything You Need to Know
LLC certification refers to three types of certificates companies receive as an LLC (Limited Liability Company) entity.4 min read
LLC certification refers to three types of certificates companies receive as an LLC (Limited Liability Company) entity. To remain certified, an LLC must file annually with the state where it is registered and submit major changes, such as changes in ownership, in a timely manner.
What Are LLC Certificates?
The three types of LLC certificates are:
- Certificate of Organization: This is filed with the state when establishing the LLC.
- Member Certificates: Given to the members (owners) who own a piece of the company.
- Certificates of Good Standing: Issued each year when the LLC meets the annual filing requirements.
These certificates assist in working out ownership interests, profits, and taxes based on the flexible corporate structure allowed as an LLC. If any of the three certificates are not updated, there could be issues with business ownership and registration.
Certificate of Organization for a Limited Liability Company
The place of principal operations for an LLC determines which secretary of state you register with. Until the Certificate of Organization has been filed, the LLC is not considered a legal company. In some states, they refer instead to the "Certificate of Formation" or the "Articles of Organization." These forms have the same purpose as the Certificate of Organization.
The business will receive a copy of the Certificate of Organization; it's best to keep this with all the LLC's creation documents. These documents should include information about the number of units distributed to members, annual filings, and Certificates of Good Standing.
What Is Included in a Certificate of Organization?
Depending on the state you're filing in, the information required for the Certificate of Organization varies. The most common information includes:
- The LLC name, usually intended to be "company name LLC."
- The effective date of the LLC.
- The name and address of the Registered Agent. This can be an attorney who receives all important legal documents on behalf of the LLC.
- Addresses for the registered office or the company's principal office.
- Who is managing the LLC? Members or managers.
- In some states, you may need to give the name and address of just one member; sometimes you are required to list them all. The same goes for organizers.
Once the documents have been completed and compiled, they need to be mailed to the relevant secretary of state with fees included. Check with the state's secretary of state or business division to find the necessary information about filing the business registration forms.
Which States Require a Certificate of Organization?
Here are a few examples of states and the documents required for LLCs:
New Jersey: Certificate of business formation (http://www.state.nj.us/treasury/revenue/filecerts.shtml).
Delaware: Certificate of formation and a cover letter (https://corp.delaware.gov/llcform09.pdf).
Iowa: Certificate of organization requirements are listed, but no application form is provided (https://www.legis.iowa.gov/DOCS/ACO/IC/LINC/Section.489.201.pdf).
Idaho: Certificate of organization (https://sos.idaho.gov/corp/2015/LLC%20Cert%20org%202015%20FILL.pdf.)
Pennsylvania: Certificate of organization (http://www.dos.pa.gov/BusinessCharities/Business/RegistrationForms/Documents/RegForms/15-8913%20Cert%20of%20Org-Dom%20LLC.pdf)
How Is a Certificate of Organization Different From Articles of Organization?
Whether called a certificate of organization, articles of organization, or something else, documents must be completed to form an LLC in most states. The document types and official form names matter little; it's more in the details required on the form by each state.
How Do I Submit an Application for a Certificate of Organization?
The form is usually in PDF format. There are a few states, such as Iowa, that require you to create your own form. After you've completed the forms, the state websites typically require that you pay the filing fee with a credit card.
Do I Need an Attorney to Apply for a Certificate of Organization?
Applying for an LLC is simpler if you're on your own. You may need an LLC attorney to help you fill out the forms if you have a complex organization or multiple members.
What are Member Certificates?
LLC membership certificates have three main pieces of information:
- The number of units designated
- State of origination
- The name of the person receiving the certificate
When the LLC is registered, that's when most member certificates will be issued. If there are ownership changes, new certificates may be issued, making the old certificates redundant.
All member certificates and their information should be recorded in the LLC register. The register notes the number of units the LLC has and how they're distributed to members. You can find lots of member certificate templates online.
The secretary of the LLC usually signs the certificates. Depending on the operating agreement, a witness or another officer's signature may be required, but they don't need to be notarized.
The original copy goes to the member as proof of ownership, and a copy is kept with other documents for a record of all outstanding certificates.
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