An article of organization is a legal document that allows your business to be registered as a limited liability company (LLC). Although the form to register your LLC is quite straightforward, there are a few steps you need to take first to ensure you have the correct information. This article explains how you can file an article of organization and what to expect afterward.
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There’s a lot of paperwork to fill out when registering a new business as a limited liability company (LLC). There are tax files, employee eligibility forms, legal documentation, banking forms, and more. You’ll need to stay organized to ensure you don’t forget to file something important and that your new business starts out on the right foot.
One critical document you must complete and file to register your business as an LLC is an article of organization. In this guide, we explain what an article of organization is, what it must include, how to file it, and what to keep in mind after you submit it.
- An article of organization is a legal document you need to file to set up your business as an LLC in any state.
- While specific requirements vary between states, articles of organization usually must include your business’s name and address, a description of the purpose of your business, your registered agent’s name and address, and your business’s start date.
- Key steps when filing articles of organization include finding a registered agent, organizing all relevant information, and paying a filing fee.
- Different states have additional requirements for filling in an article of organization. Visit your local government website to check what you’ll need before completing and submitting it.
- Articles of organization may take some time to be approved. During this time, there are several steps you can take to continue setting up your business.
What Are Articles of Organization?
An article of organization is a legal document required to establish a limited liability company (LLC) in any state. It’s sometimes called a “certificate of organization” or “certificate of formation.” It includes essential information like the name, purpose, and structure of your business, the name and address of your registered agent, and more.
Articles of organization typically must be filed with the Secretary of State for your state. There are multiple Secretaries of State and 1 United States Secretary of State, so it’s important to check that you’re filing your article of organization in the right place.
You need to pay a fee to have the Secretary of State process your article of organization. These fees vary between states and range from $35-$500. Processing times also vary, with many states taking around 10 business days.
Articles of organization vs. articles of incorporation
LLC articles of organization are similar to articles of incorporation. However, an article of organization allows you to create an LLC (which has elements of a corporation and a partnership), while articles of incorporation allow you to create a corporation. Although many people use these terms interchangeably, legally, they’re different.
Below, we break down what companies, partnerships, corporations, and LLCs are to help you understand their similarities and differences.
Understanding companies, partnerships, corporations, and LLCs
- Company: The legal name for a group of people operating as a single entity in a commercial or industrial setting.
- Partnership: This is when 2 or more co-owners agree to run a business for profit. The partners share the profits and personal liability for the business’s debts and lawsuits. This liability can be unlimited, depending on the type of partnership. A partnership’s profits and losses pass to the owners to be taxed at a personal level. You don’t need to register a partnership formally.
- Corporation: Corporations are formed through a process called incorporation. They have a separate legal identity from their owners, called shareholders. This protects the shareholders from personal liability for the business’s debts or lawsuits. Generally, corporations pay corporate tax and shareholders also pay personal taxes on their profits. Corporations must also follow strict management rules.
- LLC: A type of company that combines features of corporations and partnerships. Like a corporation, LLCs are legal entities separate from their owners, meaning the owners are not personally liable for the LLC’s debts or liabilities. Like a partnership, an LLC can pass profits and losses to its owners to be taxed as personal income, avoiding double taxation.
Do I need an article of organization?
You must file an article of organization if you plan to open an LLC.
It often makes the most sense to file an article of organization in the state you intend to conduct business. However, you can technically file an article of organization with any state’s Secretary of State. Business owners may choose to set up their LLCs in a particular state because the state has lower filing fees, offers a more favorable business environment, or doesn’t require the owners to make their personal information publicly available.
You may need to register as a foreign LLC and find a local registered agent if you conduct business in a different state from where you originally filed your articles of organization.
As a foreign LLC, you may also need to pay taxes in your registered state. State tax laws vary, so it’s important that you speak to an accountant about how this may impact you.
What You’ll Need to File Your Article of Organization
Depending on the state, the following information may need to be included in your article of organization:
- Legal name and address of your business entity.
- Purpose of your LLC. Some states allow you to provide a broad description, while others require something more specific.
- Start date of your LLC. This is often the date you file your articles of organization or the date they’re approved, but you may be allowed to give a date in the future.
- Name and address of your registered agent. This is a person or organization residing in the state where your LLC is registered who will receive legal documents and other correspondence on behalf of your LLC.
- Names and addresses of the members of the LLC—specifically owners and managers.
- Name, address, and signature of the person filing the articles of organization.
- How long you intend to operate.
A state-level Secretary of State will use this information to determine whether to approve your articles of organization.
Each state will have a specific list of the information required to file your LLC articles of organization and the filing process, including whether you can do it online. Visit the local government website for the state where you intend to register your LLC to review these requirements.
How to File Articles of Organization
Step 1: Name your business
You’ll start by picking a name for your LLC—if you haven’t already.
Requirements for naming an LLC vary between states. Generally, you’ll need to pick a name that no other business in the state uses. However, you may be able to choose the name of a business in a different state as long as you don’t infringe on their trademark.
Additionally, you may need to avoid including certain words like “insurance” or “bank” in your LLC’s name. The name also usually needs to include “LLC” or “limited liability company.”
There are several ways to check if the business name you want to use already exists. Start with a basic Google search. Also, most Secretary of State offices maintain a list of business names and may have an online checker tool you can use. County clerk offices sometimes maintain similar records, too. You can also search the US Patent and Trademark Office’s database.
Step 2: Find a registered agent
You can’t form an LLC without a registered agent, so this is an essential step. Your registered agent is a nominated person who will accept legal documents and other official correspondence on behalf of your LLC. For example, they’ll accept papers if your LLC is sued or is part of any other legal proceedings.
Your registered agent must be in the same state your LLC is registered in. The specific rules around registered agents vary between states, however. In certain states, you may be able to nominate yourself as a registered agent if you have a physical address in the state. Other states require registered agents to be attorneys.
Before choosing a registered agent, check the qualification requirements in your state. Alternatively, you could hire a registered agent service provider. These are businesses that act as paid registered agents. They ensure there are always people available to handle documents during business hours.
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Step 3: File your article of organization
Once you’ve decided on a name and found your registered agent, it’s time to file your article of organization.
Your local Secretary of State’s website should list all the information you need to fill out your article of organization. It should also detail whether or not you can complete and submit the form online, the cost of submitting the form, and how long you will have to wait for a response.
Here’s what you’ll need to do if you’re allowed to file the articles online:
- Visit the state-level Secretary of State’s website.
- Gather the necessary information and fill out the designated form.
- Submit it, then pay a filing fee to file the article of organization.
Here are the steps to follow if you aren’t permitted to file online:
- Request a physical article of organization form from the relevant Secretary of State to come in the mail, or print one out yourself from their website.
- Gather the necessary information.
- Fill out the form.
- Mail it to the state-level Secretary of State’s office.
- Pay a filing fee via check according to the details provided by the Secretary of State’s office.
Your state-level Secretary of State’s website should include any additional steps you need to take to ensure your articles of organization are submitted properly.
What to Do After Filing
After you file your articles of organization, you need to wait for them to be approved. In the meantime, you can take several other steps toward setting up your business.
Obtain an Employer Identification Number (EIN)
You’ll need to apply for an EIN if your LLC has employees. This is a unique, 9-digit number issued by the Internal Revenue Service (IRS) to help identify your business when you issue your taxes. You’ll need this number not only to file taxes but also to get a business license and open a business bank account.
Open a business bank account
Speaking of which, the next step is to open your banking account for your business. This will separate your LLC’s finances from your personal ones, simplifying budgeting, tax filing, and reporting. You might also consider applying for a business credit card.
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Get any necessary business licenses
Next, you must check whether you need to apply for any business licenses.
The Small Business Administration’s (SBA) website lists federal licenses and permits you may need to obtain, depending on your industry and business activities.
Also, you should check with your state and local business authorities to determine any further business licenses you may need.
Create an LLC operating agreement
An operating agreement is a legal contract between the LLC owners detailing how the business will run. It addresses topics like owner responsibilities and titles, contribution requirements, how disputes will be resolved, and the dissolution of the business.
While it’s not a legal requirement, an operating agreement helps you run your LLC smoothly.
Publish a notice of formation (in some states)
Nebraska, Arizona, and New York states require you to publish a notice of formation in the local paper. This printed announcement lets residents know your business name, location, and activities.
An article of organization is an important document that allows businesses to form an LLC. It includes essential information such as your business name, details of your registered agent, and business purpose and must be processed with the state-level Secretary of State’s office.
Filing an article of organization document can take time and effort. Additionally, different states have specific rules, requirements, and fees for filing.
However, by following the proper steps to complete and submit your article of organization, you’re more likely to experience an easy registration process and have your LLC up and running smoothly.
What are state divisions of corporations?
State divisions of corporations are government offices or agencies that oversee and regulate business entities’ activities within a US state. They handle business registration, check the availability of business names, file documents, maintain records, issue licenses and permits, and more. Check out your state-level Secretary of State’s website for more information.
What’s the difference between articles of association and articles of incorporation?
Articles of association outline the specific regulations for a company’s operations—for example, its purpose and how it should complete tasks. On the other hand, articles of incorporation refer to any documents required to create and register an organization.