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. 3 min read
2. LLC Organizer Eligibility
3. LLC Organizer Liabilities
4. LLC Member Defined
5. LLC Organizer vs. LLC Member
6. LLC Documents
Updated October 28, 2020:
An LLC organizer files the business's formation documents. 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 his or her power to the members of the LLC.
Until this point, however, the organizer is responsible for ensuring that the business's 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 under oath that everything in the Articles of Incorporation is correct.
By signing the Articles of Incorporation, 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 a mailing address where they can be contacted. If a business acts as the LLC's organizer, the name of the organizing business and the individual who is signing on the business's behalf must be given.
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.
What Is an LLC?
LLC is an acronym that stands for limited liability company. An LLC is a business entity that combines aspects of a corporation and a partnership. The owners of an LLC are referred to as members. Ownership of an LLC does not have the same restrictions as other business structures, so LLC members can include:
- Entities outside the United States
- Other LLCs
In an LLC, owners manage the company but are cannot be held personally liable for the business's debts and obligations.
LLC Organizer Eligibility
Organizers have no legal requirements to do anything other than to create and submit the business's formation documents. They must ensure that all required attachments and fees are included with this filing. 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 are also allowed to reserve a business name before the formation documents are submitted and assist in drafting the formal operating agreement that dictates how an LLC is run.
An LLC's operating agreement stipulates 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, ongoing 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.
However, organizers' liabilities may be expanding. A legal decision handed down in 2010 may require future organizers to disclose if they would benefit from profits generated by the LLC or not.
If an LLC member recruits others to invest in the LLC, he or she may be considered a fiduciary. This means that he or she must disclose the extent to which he or she profits from the business when recruiting other members.
LLC Member Defined
The LLC owners are also called members. LLC members are responsible for the LLC's operations, administration, and debt. An LLC member can be an individual, corporation, foreign entity, or another LLC.
Members decide how they will divide the ownership interests of the business among themselves. All states allow for single-member LLCs, so an LLC is not forced to have other members. An LLC member can be an organizer, but the organizer could also be a non-member.
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. However, it is consistent that information about the LLC members will not be listed here.
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.
The LLC's organizer must file creation documents with the secretary of state, including the LLC's name and registered address as well as a list of all its members.
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