There are two main documents to establish when forming an LLC. First is the articles of organization. Next, is the operations agreement. While the operations agreement is a critical document that outlines the LLC’s processes, members aren’t required to file this document with their state. Meanwhile, the articles of organization are a state requirement. Note that the articles of organization is sometimes called by other names such as “articles of formation.” Regardless of your state’s filing procedures, the following components are typically required by all states. Anyone forming an LLC should read on and familiarize themselves with each component.
The main thing to keep in mind when naming your LLC is that it must be a name that isn’t already registered. A quick online search of your Secretary of State’s website can help determine whether a name is available.
The registered agent is the individual assigned to receive formal communications on behalf of your LLC. These communications include important tax documents and lawsuits. The articles of organization will not only require the registered agent’s name but also a physical address. In most cases, a member of the LLC will serve as the registered agent and the business address will serve as the physical address of the registered agent. However, in some cases a lawyer is named the registered agent. Thus, all formal communications including subpoenas are sent to his/her law offices. Keep in mind that the registered agent must be kept up to date. If the registered agent is an LLC partner and he/she leaves, the appropriate paperwork needs to be filed to name a new registered agent.
Statement of Purpose
Your articles of organization’s statement of purpose doesn’t have to be anything fancy. In fact, some LLCs stick with this simple sentence:
“The purpose of the Limited Liability Company is to engage in any lawful activity for which a Limited Liability Company may be organized in this state”
Some states require that the articles of organization specify how the LLC will be managed. There are two common entries here:
- Member Managed. This is the most common management choice. Here the owners (members) of the LLC also manage the LLC.
- Manager Managed. Under this structure, one member or group within the LLC is charged with management duties. In some cases, an outside party is hired to manage an LLC. This is done in cases where it wouldn’t be practical for each member, especially in larger companies, to hold management responsibilities. Outside parties are given management duties when LLC members lack the necessary management experience.
At least one authorized signer is required to leave their autograph on the articles of organization. However, in cases of multiple members, it’s a good idea to have all members who are managing the LLC sign the document.
Draft the Right Articles of Organization For Your LLC
As you can see, the basics to a traditional LLC’s articles of organization aren’t too complicated, but do require some research in finding an available name. Some forethought about who should receive important business documents and how the LLC will be managed will also be required. We not only know each component of the articles of organization, but we can also streamline the process for multiple LLCs. Call us today at 512-757-3994 for a consultation.