Do you want to form a new limited liability company? The most important part of the LLC formation process is the preparation and filing of a document known as the articles of organization, which is the form you submit to the state to officially create your company.
The information required for the articles of organization varies a bit depending on which state you’re forming a business in, but for the most part the requirements are fairly standard and can be done yourself or by an LLC formation service.
If you’re wondering what kind of information goes in the articles of organization, how to file this document, or if you can get assistance with the preparation, you’ve come to the right place. Read on as we walk you through everything you need to know about the LLC articles of organization.
What Is an LLC?
Before we get too far into the details, let’s quickly address some of the basics. The limited liability company is a business owned and operated by one or more people, who are often referred to as “members” of the LLC.
The LLC is a hybrid business structure that combines the casual flexibility of sole proprietorships and general partnerships with the limited liability protection of a corporation.
The main reason for the LLC’s popularity is because it provides personal asset protection, which means that creditors can only pursue your business assets in a lawsuit against your company, while your car, house, and personal bank accounts remain protected.
In addition, many entrepreneurs save a considerable amount of money on taxes thanks to the LLC’s “pass-through” taxation, which has the LLC owners claim business profits or losses on their personal returns, and there is no corporate-level taxation.
Articles of Organization: What Is It?
The articles of organization is the name given to the document that you file with the state to form your limited liability company. Because each state governs LLCs a bit differently, the information required for the articles of organization varies depending on which state you’re forming a business in.
For the most part though, you’ll need to include the following info in your articles of organization:
- Your LLC’s business name
- The street address of your business
- Identity and street address of your registered agent
- Names of your LLC’s owners
- Identity of the LLC organizer
- Name of the LLC manager (if applicable)
We sometimes hear questions from our readers about the LLC organizer and LLC manager, so we’ll briefly describe these positions before we move on.
The LLC organizer is simply the person or business entity that is tasked with forming the company, while the manager is in charge of the daily managerial role. Most limited liability companies don’t designate a manager and instead choose to have their ownership group handle this aspect.
How to Prepare and File the Articles of Organization
Most states offer templates for the articles of organization on their state business website, or on the Secretary of State’s site.
With these templates, you can easily fill in the exact information requested by the state, and know that you’re not missing anything important along the way. In some other states, you might need to draft your own articles of organization from scratch, which still doesn’t require too much effort if you know what you’re doing.
Once your articles of organization document preparation is complete, you can file this form with your state government. There is always a fee associated with this step, and it can vary from around $50 in some states all the way up to several hundred dollars in other states. Before you file your articles, make sure you have enough money to cover the LLC formation fee for your state.
If you aren’t interested in the DIY route, you have some other options. You could hire a business lawyer, which provides a great deal of peace of mind, but also costs quite a bit of money.
Our favorite option is to hire a business formation service to help form your company. There are plenty of reputable companies offering this service, and their rates are usually much more affordable than a business attorney, especially considering the tight startup budgets many LLCs operate with.
If you’re interested in using an online business formation service, you can take a look at our guide to the best LLC formation services, or if you’d just like a quick overview, here’s a look at our top three:
- Northwest Registered Agent ($225): For the price point of $225, Northwest will form your LLC and include a full year of their premium registered agent service. They also have next-level personalized customer support that makes Northwest one of our favorite companies in this industry.
- Zen Business ($39): Zen Business undercuts Northwest’s price tag, while also offering a free year of registered agent service. While Zen Business doesn’t have the same level of customization for their customer service as Northwest does, they do have thousands of fantastic customer reviews available online, which can be quite the advantage depending on your preferences.
- LegalZoom ($79): LegalZoom can’t match Northwest or Zen Business when it comes to value overall, and they don’t include any registered agent service with their LLC formation packages either. However, LegalZoom has a massive customer volume and impressive brand power, so if you want to use the most popular service available, LegalZoom is worth a look.
All told, there’s nothing too complicated about the articles of organization, but that’s not to say that this document isn’t incredibly important. Without the articles of organization, you can’t form a limited liability company. In any state, the moment your LLC is formed is the moment the state accepts and processes your articles of organization filing.
You can certainly DIY the process of preparing and filing this document, but there’s also help available if you want it through services like LegalZoom or Zen Business. Whether you have the budget to hire a lawyer for this role, or if you choose to go with the affordability of an online business services company, there are options to make this process relatively painless.