LLC Organizer: Everything You Need to Know
An LLC organizer is the person or entity who files the documents for formation of the LLC in the state. 4 min read
An LLC organizer is the person or entity who files the documents for formation of the LLC in the state. The paperwork is typically filed with the Secretary of State's office, and every LLC is required to have at least one organizer. After the LLC is set up and formed, the organizer usually gives up all of the power to the members of the LLC.
Until this point, however, the organizer is responsible for ensuring that all articles of incorporation are compliant with state requirements. The organizer also makes sure the filing fees are paid when the application is submitted. The organizer affirms that everything in the articles of incorporation is correct, under oath.
By signing Articles of Organization, the applying LLC agrees to conduct business activities that conform to the rules set by the state. Individual organizers must print their name, sign, and provide an address. If a business acts as the organizer, the name of the business must be given, as well as the name of the individual who is signing on the business' behalf.
Organizers and Registered Agents are not one and the same. Organizers usually perform duties limited to the initial creation and filing of the LLC documents. They cannot share in the profits or responsibilities of the LLC unless they are members of it too.
What is an LLC?
LLC is an acronym that stands for limited liability company. An LLC is a business entity that is legally recognized and combines aspects of a corporation and a partnership. The owners of an LLC are known as members by the IRS. Ownership of an LLC does not have the same restrictions as other business structures, so LLC members can include individuals, corporations, entities outside the United States as well as other LLCs. In an LLC, owners manage the company but have protection against liability for debts and obligations.
LLC Organizer Eligibility
Organizers have no legal requirements to do anything other than the create the formation documents. They can be assigned other tasks as allowed by state law. Some states allow organizers to act as an LLC's registered agent and receive legal paperwork for the company. They're also allowed to reserve a business name before the formation documents are submitted. Organizers can assist in drafting the formal operating agreement that dictates how an LLC is run.
The operating agreement includes things like how members vote, what their duties are, and how profits are divided up. Such agreements are not required by each and every state. However, drafting an agreement is a practical option to help clearly lay out how an LLC operates.
LLC Organizer Liabilities
No liability, on-going duties, or other significance is attached to being the Organizer of an LLC. Generally speaking, once an LLC is set up and filed, the organizer has no other responsibilities or duties related to the LLC. As of 2010, however, organizers' liabilities may expand after a legal decision in one state.
The decision made in the 2010 case may require future organizers to disclose if they would benefit from profits generated by the LLC or not.
LLC Member Defined
LLC members are individuals who can be a member of the LLC along with any others who agree to go into business with the LLC. LLC members are the individuals in charge of the operations, debts, obligations, and management of the LLC.
Members are generally considered to be the owners of the LLC, and they may split ownership interests in any manner they so choose. All states allow for single-member LLCs, so an LLC is not forced to have other members. It is possible for an LLC member to also be an LLC organizer, but this is not required.
LLC Organizer vs LLC Member
The LLC formation documents have an organizer section at the bottom of the form. This section varies depending on the state where the LLC is being formed. It's not a place to put any information about the LLC members because the state generally does not need to know anything about the members. The LLC is formed by the laws set forth by the state for businesses, and these requirements do not depend on LLC members or knowing anything about them individually.
When the business selects an organizer, the organizer will be required to file LLC creation documents with the secretary of state or whichever state agency assists with entity formation. Typically, the documents will require the organizer to list the name of the LLC, the registered address of the LLC, and the names of all members.
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