If you are considering forming your business as a limited liability company (LLC), one question you may have is, “what information is required on the formation documents?” Knowing this ahead of time helps you save time as you begin the formation process.
The formation document for an LLC is called the articles of organization or certificate of organization. Each state has its own version of this document creating a number of variances in the amount and type of information required. This article outlines the most common information requested by the states.
Company Name
The desired name of the LLC must be included. That name must typically contain an LLC identifier, such as “Limited Liability Company,” or an abbreviation, such as “LLC” or “L.L.C.” Undertaking a preliminary name availability search prior to submitting the articles of organization will help to see if your desired name is available. Keep in mind that the state holds final approval rights on the desired name to ensure it is not already in use by another company in that state or is not “deceptively similar” to a name already in use.
Business Purpose
The business purpose is an explanation of what the company is formed to do or provide. There are two types of business purpose clauses: general and specific.
General business purpose – some states will accept a general-purpose clause, which basically states that the company is formed to engage in “all lawful business.”
Specific business purpose – some states require a more complete explanation the types of products and/or services the company will provide.
Registered Agent
Virtually all states require LLCs to have a registered agent in the state of formation. The registered agent is the party responsible for the receipt of important legal and tax documents for the LLC. The registered agent must have a physical address (no P.O. boxes) in the state of formation and must be available during normal business hours.
Examples of documents sent to the registered agent include Service of Process (or notice of litigation), which is the document that initiates a lawsuit; mail from the state; and often taxation documentation from the state’s department of taxation.
One thing to note is the registered agent address is a matter of public record. In states that do not require the legal address of the business to be included in the formation documents, the registered agent address is the only address on file for the company.
Many business owners, particularly home-based businesses, choose to use a registered agent provider both to ensure these important documents are professionally handled to keep their addresses out of the hands of marketers.
Organizer
The organizer is the person or company preparing and filing the articles of organization with the state. Most states require the name and signature of the organizer to be included in the formation documents and some also require the organizer’s address be included.
Management Structure
LLCs can be managed by members or by managers, and the articles of organization must state which group will manage the company. When an LLC is managed by members (owners), it more closely resembles a partnership. When an LLC is managed by managers, it more closely resembles a corporation since the owners will not be involved in the daily business decisions of the company.
Members or Managers
Many states require the names and addresses of the initial members (if the LLC is member-managed) or managers (if the LLC is manager-managed) be included on the formation documents.
Legal Address of the Company
Supplying the legal address, or the principal address, of the business is optional in many states but a few states do require it.
While this is not a complete list of everything a state might require on its articles of incorporation, it outlines the typical items and will help you assemble this information prior to starting the incorporation process.
