Learn more about what Articles of Organization are in business.
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The Articles of Organization business definition is a document you file with the state to form a legal entity called a limited liability company (LLC). You file your Articles of Organization with the Secretary of State, or another state agency, for your LLC to be on record.
This document lists basic information regarding your business. Articles of Organization contain:
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.
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.
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.
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 reduction of dividends that are seen with corporations.
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. An operating agreement serves a different purpose. Operating agreements can address various business topics but generally cover:
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.
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.
If you’re an aspiring business owner and new to the process of business formation, there’s no need to worry. Our company has business formation and compliance services that will make the process of starting your LLC easier. We’ll help you file your paperwork with the appropriate state agency so that you don’t have to worry.
Disclaimer: The content on this page is for informational purposes only, and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.