How to File LLC Articles of Organization
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What are LLC articles of organization?
Articles of incorporation are documents that establish the existence of a corporation and are sometimes known as certificates of incorporation. In order to form a limited liability company (LLC), you must file articles of organization with the state and pay a filing fee.
The required information can vary, but the basic elements are details about your incorporators and board of directors, business contact information, the purpose of your LLC and signatures. Filing fees will vary by state, but you shouldn't end up paying more than $200 to file unless you need to make any amendments.
Limited liability companies are a popular business entity choice among small-business owners. It’s relatively easy to form an LLC, and they offer many advantages, such as tax flexibility and liability protection for the owners.
To create an LLC, you must file articles of organization with the business filing agency in the state where your business is located. But there are also important items to check off your to-do list before and after filing your articles of organization. Articles of organization are just one step in the journey to forming your LLC.
Learn more about LLC articles of organization, how and when to file and what other steps you need to take to establish your LLC and maintain it in good standing.
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What’s included in the articles of organization
Articles of organization are typically a short formation document, no more than a couple pages long. Although the details vary by state, you’ll typically need to provide the following information in your articles of organization:
Your LLC’s name.
Your LLC’s address.
The purpose of the LLC: You might have to provide a brief description of your product or service. Some states allow you to choose a generic “for all legal purposes” description.
Effective date that you will start the LLC: Check with your state’s business filing agency if you’ve already started the business. If you don’t provide a start date, the date that the state accepts your filing will be used.
Name and address of the registered agent: This agent or entity must have a physical in-state address and be available to accept mail during regular business hours.
Name and signature of the organizer: This is the person filing the articles of organization. They might, but need not be, an owner in the business.
Depending on the state, you might also be asked to provide names and addresses of the LLC’s members (or the LLC’s manager if you have a manager-managed LLC). And if your state doesn’t have a separate form for professional LLCs (an LLC owned by licensed professionals, such as doctors and lawyers), you will need to designate whether your company belongs in this category on your articles of organization.
How to file articles of organization for your LLC
Filing your articles of organization doesn't have to be complicated, as there are plenty of resources out there to give you insight, including ones specific to your state. We've broken down a few aspects of how to file your articles of organization that should make the process go smoothly.
There are a few steps that you’ll need to take before filing your articles of organization to prepare for LLC ownership. Specific requirements vary by state, but most states require you to have two things ready to go before you file your articles of organization.
1. Choose your LLC’s name
First, you’ll need to choose a name for your LLC, meeting the following requirements if required:
Name must end with a designation of “LLC,” “L.L.C.” or “Limited Liability Company.”
Can’t include words that are reserved for certain regulated industries (e.g. “insurance” or “bank”).
Name must be unique from other LLCs operating in the state.
Most states, such as California and New York, have databases that allow you to search for available business names. You can also find available names by using online directories such as Yelp, as well as the Yellow Pages and Better Business Bureau.
Once you have a name that you like, you can confirm its availability with your state’s business filing agency. In exchange for a fee, you can even reserve a business name for a period of 30 to 120 days.
2. Appoint a registered agent
A registered agent, or resident agent as it’s called in some states, is a person or entity that accepts official mail and legal papers on behalf of your company. When filing your articles of organization, you’ll be required to identify your registered agent, in order to give the public an easy way to contact your business for official matters.
If you have a physical address in the state where your business is operating, you can name yourself or a co-owner of the company as your registered agent. If you have a business attorney, you can opt to appoint them as your registered agent. Online legal services, such as LegalZoom, also provide registered agent services for an annual fee.
Once formed, your LLC is required to maintain a registered agent and notify the state of any change in the agent’s identity or address.
Filing your LLC articles of organization
Once you choose your LLC’s name, appoint your registered agent and comply with local licensing laws, you’re all set to file your articles of organization.
To file articles of organization for your LLC, follow these steps:
1. Contact your state’s secretary of state or business filing agency
You can contact your secretary of state or business filing agency either by going to the office, calling or visiting their website to find the necessary information and requirements for filing articles of organization in your state. You will most likely find information such as:
Required information you'll need to gather.
How you can file.
How much it will cost to file.
Above, we have also listed the most common and basic information that you will need to include in your articles or organization.
2. File your articles of organization
As stated above, the secretary of state office or website will give you information on how you can file, but online or mailing in a paper copy are common options. Most states also offer a fillable PDF form or an e-filing portal.
3. Pay the LLC formation filing fee
The price to file your articles of organization will vary based on your location, but typically this cost falls anywhere from $50 to $200 in most states.
4. Receive a certificate of formation
After submitting, you will get a certificate of formation back from the state, along with a copy of your articles of organization. The original will be kept on file with the state.
5. Publish notice of formation, if required
New York and Arizona have this additional step. You are required to publish notice of your LLC’s formation in a local newspaper. In some cases, you will also need to provide proof that you have done this in order to complete your LLC formation.
Most states will process your LLC articles of organization within one to two weeks, but offer expedited processing for an additional fee. If any information that you provide in your articles of organization changes, follow your state’s procedures for amending your articles.
After filing your LLC articles of organization, you’re probably ready to focus on the work of running your business. But along with your daily responsibilities, there are a few specific things you need to take care of to maintain your LLC in good standing.
Here are additional steps for maintaining your LLC:
1. Create an LLC operating agreement
Even though it's not required by any state, an LLC operating agreement is far more detailed than your articles of organization and provides the organizational and structural blueprint for your new LLC and should be considered a vital step in the formation process.
Your operating agreement will contain information about the rights and responsibilities of each business owner, the amount of money or assets each owner has contributed and voting and buy-out procedures.
An operating agreement is a legal contract that you’re obligated to follow, so it’s best to have the help of a lawyer in drafting it. If you don’t have the budget for a lawyer, you can also use an online service like Rocket Lawyer. Distribute a copy of your LLC operating agreement to each owner, and store the original along with your certificate of formation and other official papers.
2. Apply for an EIN if you need one
All multi-member LLCs and LLCs with employees need an employer identification number (EIN) for federal tax filing purposes. Only single-member LLCs with no employees that are taxed as disregarded entities are OK without an EIN. Applying for an EIN is free and takes just moments on the IRS’s website.
3. Separate your business finances
One of the main benefits you get from filing articles of organization and establishing an LLC is personal liability protection for all members. If your business is sued or owes a debt, the claimants are limited to recovering out of your company’s assets. However, your personal assets are safe only if you take steps to maintain financial separation between your business and personal life. The best way to do that is by opening a separate business bank account and business credit card that you use only for business purposes.
4. Comply with annual filing requirements
Take some time to learn about your state's rules for LLC reporting and tax filing. Many states require LLCs to file an annual report and pay an annual tax or fee. The report typically contains information about your LLC’s income, business activities and members. For federal tax purposes, most LLCs are pass-through entities, which means that members report their share of the LLC’s income and losses on their personal tax return. Despite this, some states levy a tax on LLCs, along with a fee based on the LLC's income.
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This article originally appeared on Fundera, a subsidiary of NerdWallet.