Articles of Organization Definition

This document lists basic information regarding your business. Articles of Organization usually contain:

• The organizer’s information
• The business’s name
• A general statement of purpose
•  The business’s principal office 
• The name and address of the business’s registered agent
•  The date your business becomes effective

You must include the appropriate fee with your Articles of Organization. Once you submit your LLC’s Articles of Organization and they receive approval from the appropriate state agency, your business is officially registered as an LLC. 

Other Names for Articles of Organization

Articles of Organization, by definition, are specifically for limited liability companies. This isn’t to be confused with Articles of Incorporation, which are specifically for the formation of another legal entity called a corporation. In some states, Articles of Organization are referred to as a Certificate of Formation, Articles of Formation, or Certificate of Organization. However, Articles of Organization is the most common name.

Benefits of Filing Articles of Organization with Our Assistance

Filing Articles of Organization is mandatory to set up an LLC, and doing so improperly can preclude your business from enjoying the liability protection of an LLC. This isn’t the step where you want to go at it on your own. That’s why we provide an LLC Formation Service to help you get your business up and running.

Your business may also be required to amend your Articles of Organization from time to time as things change for your business. We can assist you with filing an individual amendment, or you can use our Worry-Free Compliance Service, which includes up to two amendment filings per year.

Articles of Organization: Benefits of Creating an LLC

There are several advantages of Articles of Organization. Primarily they are the only means to establish an LLC and the liability protection that comes with it. The Articles of Organization benefits you by subjecting LLC members or managers  to personal liability only in limited circumstances. Another huge benefit comes with pass-through taxation.

Corporations are double taxed because they pay taxes at the corporate level and then again on individual shareholders’ income taxes. With pass-through taxation, the business’s tax liability passes through to the individual owners — the business is not taxed at the entity level. This means that you will not have to deal with the disadvantages of double taxation and the reduction of dividends that are seen with corporations.

Articles of Organization vs. Operating Agreements

Creating a business can often come along with confusing terminology that can easily get things mixed up for you. You don’t want to make the mistake of confusing optional documents for documents required by your state’s filing agency. It can waste valuable time and potentially cause your document to be rejected because it’s incomplete. 

Remember that although a business’s Articles of Organization are required by the state’s filing agency, operating agreements aren’t in most states. An operating agreement serves a different purpose. Operating agreements can address various business topics but generally cover:

• Names of managing members, if any
• Capital contribution requirements
• Ownership percentages and equity distributions
• Voting rights
• Events causing dissolution

Although operating agreements aren’t required, they can be very helpful to establish clear ownership rights in a business with more than one LLC member. If members of an LLC disagree on any general business practices or finance splits, they can refer to the operating agreement to settle their disputes. We offer an LLC operating agreement template to get you started on creating a unique and effective operating agreement.

Summary

Articles of Organization will contain your LLC’s basic information and officially establish your business with the state. There are several advantages to filing your Articles of Organization. Benefits include protection from personal liability, pass-through taxation, and ease of filing.