Amendment Definition

An “amendment” usually refers to the documents used to make changes to an incorporated business entity’s formation documents. For example, LLCs and corporations use amendments to edit their founding documents.

Why would someone need to file an amendment?

Most states require business owners to notify them of any major change to their business, usually by updating the information in their formation documents. The names for these formation documents vary, but most states call these “Articles of Organization” for LLCs and “Articles of Incorporation” for corporations.

A company’s formation documents contain important information about it. Some of the info typically contained in Articles of Organization or Incorporation include:

• Business name
• Business address
• Registered agent name and address
• Management structure (for LLCs)
• Number of shares (for corporations)
• Contact information for organizers/incorporators

The state needs to have the latest information available in the articles for the following reasons:

• The registered agent is the company’s point of contact for service of process and other important legal and government notices. If the agent or their address changes, a process server might not be able to find the representative. If that happens, the business could be served with a lawsuit without the owner’s knowledge, resulting in a costly default judgment against it.

• A business’s information needs to be up to date to stay in compliance with the state and for auditing purposes.

• A company’s public information must be current so that the business and its owners can be contacted by mail or phone.

What if a business owner fails to file an amendment?

Again, penalties will vary by state, but it’s usually flirting with disaster to not file a necessary amendment in a timely manner.

For one thing, the state could dissolve the business for not being in compliance. If that happens, the LLC or corporation is no longer a separate legal entity from its owners. Someone suing the business will be suing the owners, meaning they can go after the owner’s personal savings, their home, and other assets as part of the settlement.

Not keeping the company’s formation documents current with an amendment could also prevent the business from getting a Certificate of Good Standing. This document, which is also known as a Certificate of Status, Certificate of Existence, or Certificate of Authorization, is proof that the business is in good standing with the government and authorized to do business in the state.

A Certificate of Good Standing is used for many things. An entrepreneur might need one to expand their business into another state, open a business bank account, get insurance, renew licenses and permits, and apply for loans.

What changes require someone to file Articles of Amendment?

Different states have different requirements for what changes prompt an owner to file Articles of Amendment. Basically, though, the major items listed in the original articles will usually need to be amended if they change.

Some changes may require a different form or an additional form. Sometimes changing a registered agent necessitates a separate form just for that purpose, and that might be used instead of or in addition to Articles of Amendment.

Some states will allow business owners to make certain changes on their annual or biennial report instead of filing Articles of Amendment. Entrepreneurs should check with their state government’s website to see what’s permitted.

How does someone file Articles of Amendment?

Every state has specific instructions on how to file an amendment to a company’s Articles of Organization or Incorporation. Usually, a business owner will need to provide the basic information they supplied in the original articles and list the specific changes being made.

Most states require the business to pay a fee when making an amendment. A few also require the business to publish notice of the changes in a newspaper.