What Are Articles of Organization?
Articles of organization are part of a formal legal document used to establish a limited liability company (LLC) at the state level. The materials are used to create the rights, powers, duties, liabilities, and other obligations between each member of an LLC and also between the LLC and its members.
The state also requires businesses to pay a fee when it files the articles of organization. Articles of organization are similar to articles of incorporation and are sometimes referred to as a "certificate of organization" or a "certificate of formation."
- Articles of organization are used to establish a limited liability company (LLC) at the state level.
- Articles of organization also establish the rights, powers, duties, liabilities and other obligations between each member of an LLC.
- Filing requirements for articles of organization may vary slightly from state to state.
- Articles of organization may be called "articles of association" in other countries besides the United States.
Understanding Articles of Organization
Articles of organization are filed with a state government, but many counties and cities also have their own business licensing and zoning requirements. Each LLC must meet the specific requirements for the area in which it will do business. Some industries, most notably food service and child care, are more heavily regulated than others.
Rather than having to write articles of organization from scratch, many states have fill-in-the-blank forms for filling out and filing articles of organization. For example, the Articles of Organization form from the New York State Division of Corporations, State Records, and Uniform Commercial Code comes in a handy two-page format and is available online. The filing fee is $200 in New York.
According to New York regulations, an LLC's operating agreement may be entered into before, at the time of, or within 90 days after the filing of the articles of organization. Although all articles of organization generally require the same basic information, requirements may vary slightly from state to state. Many filers of articles of organization hire lawyers to assist them with the process.
All articles of organization filings tend to require basic information about the company's business name and address, the names and addresses of members of the LLC, the names and addresses of its managers, organizers and directors, the name of the business's registered agent, and a statement of the business purpose:
- The LLC's name and address (its principal place of business)
- The nature of the LLC's business, sometimes broadly stated as "to engage in any lawful activity" for greater flexibility
- The name and address of the LLC's registered agent, which is the person authorized to accept delivery of legal documents on behalf of the LLC
- The names of the members, managers, and directors of the LLC
The articles of organization are reviewed by the filing state's company registrar or secretary of state. Once approved, the articles of organization become the legal basis for the creation of an LLC as a registered business entity and LLCs are then bound by the state laws under which they were formed. In effect, the articles of organization act as a charter.