When you are ready to file your Limited Liability Company, you will need to complete a legal document called the Articles of Organization for your LLC. This document will be filed with your state government via the Secretary of State's office and contains essential information regarding your LLC. This document, or a similar document with a different name, is used in all 50 states when forming your business entity.
In this article, I will share some of the information, tools and tips you need to be aware of when filing this very important legal document.
Your Articles of Organization provides the State where you are filing your LLC with some basic information about your LLC, such as the name and address of your LLC, who your registered agent is, what your business purpose is, and other important details.
You should be aware that each state may have a different name for this document (such as a Certificate of Organization or Certificate of Formation), as well as a different office where the document will be filed.
We are in the process of creating a state specific post for each state that explains their specific requirements, including filing fees, forms they use, and any quirky requirements from that specific state. This will be an invaluable resource since LLC's are formed at the state level and governed by state law.
What Information is Required in Your Articles of Organization?
Each state has slightly different requirements for your Articles of Organization, and may even have a different name for the document.
Here is some of the common information you will be asked to provide when you file your LLC Articles of Organization:
- Name of your LLC
- Company Street Address and/or mailing address
- Name and address of your registered agent
- Legal purpose of the business
- Information about the owners of the LLC
You should be aware that all 50 states will require a filing document, such as Articles of Organization, to form an LLC. If you are forming a corporation, then you will file a similar document called the Articles of Incorporation. Please don’t confuse these documents when you are getting ready to file your LLC!
In addition to the Articles of Organization, you will also be asked to pay a filing fee of anywhere from $50 to $500 (depending on the state you are filing in).
When you file your Articles of Organization and pay the filing fee, they will be reviewed by someone from your Secretary of State’s office (or other office that accepts these filings in your state) to make sure they comply with state law.
Assuming there are no issues, the Articles will be filed and your LLC will officially be formed.
The most common reason for LLC Articles of Organization to get rejected is that the name does not meet the statutory requirements in your state, or is deceptively similar to another already filed LLC. For this reason, you will want to pay particular attention to your state naming rules, as well as make sure to do a name search ahead of time and make sure that no other LLC is using your proposed business name.
Related Resource: Important considerations for entrepreneurs when naming your business
In some states, a decision on the filing of your LLC will be immediate, while other states may take weeks or even longer to process your Articles of Organization. For this reason, some states may offer an expedited filing option for an additional fee. This is frequently not required, but if you need your LLC formed quickly it is something to look into.
How to File your LLC Articles of Organization
Since every state is different and the rules and requirements for filing your LLC will vary depending on the state where you file, it is important to do your research ahead of time. In general, this means you will want to visit the website for the Secretary of State where you will be filing your LLC, gather the appropriate information for your Articles of Organization, complete a “draft” Articles of Organization in paper form, and then file your LLC either online, via the mail or in person.
Let’s take these steps one at a time.
Step 1: Review the Website for your Secretary of State
The Secretary of State in your home state (where you live and work and call “home”) it typically the state agency that collects information for new LLC filings.
Because states want to attract new LLC filings (these are a big money-maker for the states), they will frequently have a resource-packed website that contains all of the information you may need to file a new LLC.
Some of the common information you should be looking for when you visit the secretary of state website for the first time include:
- A downloadable copy of Articles of Organization (this will typically mirror the information that is requested for online filings)
- Instructions on how to form your LLC online. (As of this writing, every state with the exception of Maine will allow for online filing). Note that you may need to create an online account to form your LLC online.
- A list of filing fees and annual reporting requirements. This can sometimes be tricky to find. In general, fees will vary from between $100-$150, but every state is different. And some states, such as California, have a small filing fee ($70) but a large annual reporting fee (California charges a $800 franchise tax each year).
Step 2: Obtain the Required Information
Now that you have the information you need to file your LLC, you need to “fill in the blanks” on your LLC Articles of Organization. Some of this information includes:
- The company name of your LLC. As mentioned before, you will want to do a name search and review the naming rules for your state to insure that your chosen name is available. If necessary, review this article on how to come up with the proper name for your LLC.
- Your mailing address. Chances are you don’t want to make your home address public. In most states, you may use a virtual address or sometimes a P.O. Box for your mailing address. Again, in determining what is legal and proper you will want to review the instructions from your Secretary of State’s website.
- Registered Office Address and Registered Agent. It is a good idea, and we recommend, that you hire a corporate registered agent service for your LLC. This is a person or entity that is designated to receive legal documents, tax notices, subpoenas, and other legal notices for your business during regular business hours (this is also called accepting service of process). Review this article on why you, as an online business owner, should not serve in this capacity. The registered office must typically be a physical address in your state.
- Your legal purpose. Some states will ask what the legal purpose is for your LLC.
- Determine the fees and method of payment for your state.
- Determine what additional documents may be required. Although not common, some states require transmittal pages or other strange requirements along with your Articles of Organization.
Step 3: Prepare Your Articles or Organization for Filing
Once you have the basic information required by your state, you will need to fill out a draft copy of your Articles of Organization.
While some states ask only for a basic level of information, other states will also ask for information such as your legal purpose, the names and addresses of all LLC members, whether you are a member-managed or manager-managed LLC and other such information.
Step 4: Time to File!
Once you have completed all of the information requested on your state’s Articles of Organization, it is time to prepare and submit your filing. Again, we recommend that you make use of the online option if possible in your state. It is frequently faster and sometimes less expensive.
If you send your Articles of Organization in by mail, double check to make sure they are signed. This can be completed by an “organizer” of the LLC who is an agent appointed by the LLC or by a member or manager of the LLC itself. As an online entrepreneur, you will frequently be the person signing the Articles unless you hire a third party service (affiliate link), or use our DIY service, to set up your LLC.
You can also use our full service LLC setup service.
You’ve Filed Your LLC Articles of Organization… Now What?
Once you have filed your Articles of Organization (and received approval back from your state), there are some other things you need to do to make sure your LLC is legally valid.
These steps include:
- Obtain an EIN number
- Draft an Operating Agreement
- Open your Business Banking Account
- Set up your Stripe and/or Paypal Accounts
- Research and obtain the required business licenses and permits
- Make note of your Annual Reporting requirements and deadlines
Let’s review these requirements one at a time.
Obtain your EIN Number from the IRS
The first thing you must do, AFTER your Articles of Organization are approved by your State, is to obtain your EIN number online. This is something you can do for free, although the process can be a bit tricky.
You will need this number to open your business bank account, set up Stripe and Paypal accounts for your business, file taxes and run payroll, obtain your business license and/or permits, and much more.
The reason you must wait is that the name you use for your EIN must exactly match the name on your Articles of Organization. If for some reason your articles are rejected because of your name, you would need to apply for a new EIN which can be a hastle.
Draft Your LLC Operating Agreement
An operating agreement is a contract between you (as the owner/member of the LLC) and the LLC itself. It basically spells out the rules of how your LLC will be operated.
Some of the common decisions that can be made in the operating agreement include how your LLC will be taxed, how profits will be divided, when and how members will be paid, what happens if one member decides to leave the LLC, and much more.
Click here for a legal operating agreement template you can use for your LLC.
Open Your Business Bank Account
Once your LLC is formed and you have obtained your EIN number, it is time to open your business bank account. For a variety of reasons, we do NOT recommend commingling your LLC funds with your personal funds in you household checking account.
While you are waiting for your Articles of Organization to be approved, you should be researching potential banks to use for your LLC. Some of the considerations you should be considering are whether the bank offers free checking for your business, how easy it is to use their online platform, and whether they have a presence in multiple states.
Once you have opened up your business bank account, you should use it for only business income and expenses. Do not use your business bank account for personal expenses. When you are ready to take a payment, you can transfer funds from your business account to your personal checking account.
Setup Stripe and/or Paypal Accounts for your Business
When you first set up a Stripe or Paypal account for your business, it may take several days or even a week or more to be approved. Not to mention, you may experience delays in being able to withdraw your funds after your client’s pay you.
For that reason, we recommend setting up your Stripe and/or Paypal accounts as quickly as possible and get them connected to your newly opened business bank account.
The last thing you want to do is get ready to launch your first course or service and not have a way to take payments from your clients and customers!
Research and obtain proper Business Liceneses and Permits
Every state has different requirements for business licenses. Not only that, but each type of business will have different requirements.
In many cases, a business license and/or permit will be issued at the local or county level in your state. So you will want to review you local government websites to see what licenses are required.
This is another area where your Secretary of State website can provide valuable information to you as you attempt to navigate the licensing requirements of your state.
Make Note of Annual Reporting Deadlines
Depending on your state, you may have annual or biennial annual reporting requirements. For some states, the annual report is due around tax time, and for other states it is due on the anniversary month of your filing. Still other states require a one time filing within 2-3 months after you form your LLC.
For this reason, you must carefully review the requirements of your state to make sure you stay in compliance. Some of the consequences of failing to file your annual report include fines and penalties, as well and administratively dissolving or suspending your LLC. You do not want to find yourself in either of those situations!
FAQ Regarding Filing Your LLC Articles of Organization
Now that you know the basics about filing your LLC Articles of Organization, here are some additional questions that you may have throughout the process (as well as some other thoughts to keep in mind):
Do I Need to File a DBA for the Name of my LLC?
Typically, you will not need to register the name of your LLC outside of filing your Articles of Organization. The only exception to this rule is if you are doing business under a fictitious name that is separate and distinct from the name of your LLC. In that case, you can file a DBA, an assumed name or a fictitious name depending on the rules of your state.
Do I need an attorney to assist me in filing my Articles of Organization?
If you are comfortable with the process of handling important legal matters and documents on your own, and you feel that you understand the consequences of forming an LLC, then this is a fairly straightforward process and not something you will need to hire an attorney for.
However, you may have questions about how to properly run your LLC, trademarking your brand name, or obtaining proper contracts to protect your business. In these situations, consulting with, and even hiring an online business lawyer can be a shrewd idea.
As always, if you have read through this post and are still confused about how to properly set up your LLC, then you can certainly hire us to help you set up your LLC for you. At Hawthorn Law, we are able to form LLC’s (and serve as your registered agent) in all 50 states.
Do I need to File any other paperwork or additional information when I file my LLC Articles of Organization?
This will depend on the state where you file your LLC. Some states require cover sheets, docketing statements, reserved names, or even a list of all the managers and/or members of your LLC. Other states require just the Articles of Organization.
You should check with the website for the Secretary of State where you are forming the LLC if you have additional questions.
When I File my LLC Articles of Organization is it Public Record?
Privacy is an important consideration when filing your LLC paperwork. This is one big reason why we recommend using a virtual office address as well as a corporate registered agent. Some states have stricter privacy laws than others, but in general you should assume that the information you put into your Articles of Organization and file with the state will become public record and searchable by anyone that wants to look up your LLC or even your personal information online through the records of the Secretary of State.
Do I need to file my Operating Agreement?
Generally speaking, you do not file your operating agreement with the state. There may always be exceptions in various states. The operating agreement is what is known as an “internal document”, meaning that you will sign this document and save it in your legal operations file or binder. For a great template you can use to save these documents, check out our business binder.
How long does it take to form my LLC?
The length of time it takes to form your LLC will vary depending on the state where you file your Articles of Organization, as well as how you choose to file those Articles.
In general, the processing time is faster when you file your LLC online. In some cases, your LLC will be accepted and filed immediately when filed online, while in other states a human will have to review your filing and it may take several days or even weeks to get an approval.
At Hawthorn Law® we are all about Trademarks!
At Hawthorn Law®, we are all about Trademarks and brand protection. If you are a creative entrepreneur trying to built an online brand, investing in a trademark to protect the rights to your business name is one of the smartest things you can do for your business.
If you are interested in learning more about how we can help you, please feel free to schedule a strategy session so we can map out a plan for your online business. If you are ready to get started with your trademark, click here to schedule a low-cost brand strategy and trademark review session to go over your options! (If you are looking for guidance on starting your business, LLC's, or general legal proctections and are not ready to proceed with a trademark, then please schedule a strategy call instead.)