LLC Papers: Everything You Need to Know
LLC papers include formation documents such as articles of organization and ongoing documents such as annual reports that you need to file with the state.4 min read
2. LLC Formation Documents
3. Items to Be Included in the Articles of Organization
LLC papers include formation documents such as articles of organization and ongoing documents such as annual reports that you need to file with the state.
What Is an LLC?
A limited liability company (abbreviated to LLC) is a relatively new business structure that lies somewhere between a sole proprietorship concern or a partnership firm and a corporation. As in the case of sole proprietorship concerns and partnership firms, LLC owners include the business profits (or losses) of the company in their personal tax returns.
However, unlike the partners of a partnership firm, the owners of an LLC can't be held personally liable for debts and liabilities of the company. In other words, creditors of an LLC cannot pursue the personal assets of its members to settle the LLC debts.
Except in the state of Massachusetts, you can form a single-member LLC in all other states.
LLC Formation Documents
Because an LLC is a state-created entity, formation documents and forms are specific to the state where you are forming your LLC. You must file the formation documents along with the stipulated filing fees with your state.
LLC formation documents are referred to with different names such as articles of organization, certificate of formation, and certificate of organization. Some states may require more documents for creating an LLC.
Items to Be Included in the Articles of Organization
Articles of organization are the incorporating document of an LLC. An LLC comes into existence after the state approves your articles of organization.
Usually, the required forms for forming an LLC are available on the state government's website. Different states have different filing requirements, but some standard information is common.
Name of the LLC
- Find out whether the business name you want to use is available for registration.
- You can check the name availability in the LLC database of your state.
- The name you choose must comply with your state's rules.
- It must have a proper ending such as “LLC,” “L.L.C.,” or “Limited Liability Company.”
- Some states restrict the use of certain words such as “bank,” and “insurance” in an LLC's name.
Purpose of the LLC
You must include a statement on the LLC's purpose. Most of the states allow you to have it in the form of a general statement such as, “to conduct a lawful business activity for profit.” This helps you enter into a different business in the future without having to modify your existing statement of purpose.
Duration of the LLC
Most of the LLCs are formed for a perpetual duration. However, if you are forming an LLC for a specific period of time, you should specify the duration during which the LLC will be in existence.
Many states do not ask for a specific duration. In the absence of a specific duration, some states even assume that you are forming it for a perpetual duration.
Place of Business
This is the place where the principal office of your business is located. Usually, it's the place of management where accounts and records are maintained.
In case of a home-based business, you can mention your home address as your workplace. However, if you want to deduct the home office expenses for the purpose of income computation, make sure you set out a specific portion of your home as office. You must exclusively use this place and must not have any other fixed location for your business.
- A registered agent consents to receive legal documents and communication on behalf of your LLC.
- You must provide the physical address of the agent located in your state.
- You must provide a mailing address of your LLC only if it's different from its physical address.
- The mailing address can be of a different state or country and can often include PO boxes.
Members' Names and Addresses
Almost half of states require you to list out the names and addresses of each of the members.
Indicate whether the members themselves will manage your LLC or it will be managed by a manager.
The organizer of an LLC is someone who signs its Articles of Organization and files the formation documents with the state.
The LLC paperwork is not over with its formation. In most states, you must file an annual report along with the filing fees on an ongoing basis.
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