One of the first steps you must take to form an LLC is filing your Articles of Organization with the Secretary of State. While this document varies by state, it must always include certain pieces of information and it will serve as the backbone of your new company. Once filed and approved, this document will create your legal LLC as a registered entity in your state.
Tips for Writing Your LLC Articles of Organization
Writing and filing your Articles of Organization with the Secretary of State can be overwhelming if you're unsure how to proceed.
What is Included?
At the very least, almost all states require the following:
- Your LLC name and business address
- The nature of your business
- A statement of the company's purpose
- Name and address of the company's registered agent
- Name of LLC managers and members
- Management structure
- Authorized signatures
Choose an Original Business Name
While this may seem like an easy step, it's very important to check that your chosen name is not already in use in the state. This is not just for marketing purposes; the state will also require that your name be unique. If you accidentally use a name that's already in use, the cost to fix the error can be big.
Get a Registered Agent
Some states allow you to act as your own registered agent if you live in the state, although you may still want to consider choosing a third party to act as a registered agent. The registered agent is responsible for receiving important documents on behalf of your LLC and must be available during regular business hours. Choosing a third party means you won't ever be in the position of accepting potentially embarrassing legal documents in front of customers or clients and it ensures that you will keep your company in good standing with the state.
Be Careful with Your Purpose Statement
In most states, you aren't expected or required to provide a precise purpose for your LLC to exist. Still, avoid giving too specific a statement as you don't want to limit your business opportunities in the future.
Choose a Management Structure
A limited liability company can be member-managed or manager-managed. There are benefits and drawbacks to each method. Make sure you understand the difference and decide which is best for your company ahead of time as most states require specifying which type of management will be used on your Articles of Organization.
How Long Will the LLC Exist?
You may need to provide a duration for your LLC on the Articles of Organization. This refers to how long your LLC will operate, but you don't need to be very specific. Many business owners simply choose "perpetual." If your LLC was formed for a specific purpose, you may choose a specific duration, such as 5 or 10 years. In some states, LLCs have a statutory limit on their duration, although it can usually be extended.
While forming an LLC is fairly straightforward, don't be afraid to get help if you need it. After all, mistakes during the formation process can cost you big down the road. It may help to consult with an attorney or corporate services company to make sure you don't make errors as your form your company.