What are Articles of Organization?
Articles of organization are part of the legal documentation required when filing to establish a limited liability company (LLC) at the state level. These articles are used to create the powers, duties, rights, liabilities, and other obligations amongst LLC members and between the LLC business and its members.
What is the purpose of the Articles of Organization?
Articles of Organization are needed when establishing a limited liability company at the state level. It provides the secretary of state or company registrar for the state the information needed to decide whether to approve of the new business. Once filed, the secretary of state can decide whether you are authorized to conduct your business.
This document is used to create the rights, powers, duties, powers, liabilities, and obligations between each member of an LLC and between the LLC and its members.
What information needs to be included in Articles of Organization?
The filing process and what information you need to provide is state-specific so ensure that you follow the proper procedure. Most states require similar basic information including:
- Company Name
- Statement of Purpose
- Place of business
- Registered Agent
The articles of organization are public record. Be careful not to fill the form out with information that you don’t want viewable by the public. There are ways to keep your information private. Although this document requires you to fill out a name and address that is not a P.O. box, you can utilize a registered agent to keep your information private.
What is the difference between articles of organization and articles of incorporation?
Articles of incorporation and articles of organization are very similar, but have one major difference. They each aim to establish a different type of business. Articles of incorporation are filed for companies looking to form a corporation whilst articles of organization are for limited liability companies (LLCs). Articles of organization require just one registered agent, while articles of incorporation require three.
What is the cost of filing the Articles of Organization?
The state also requires businesses to pay a fee when it files the articles of organization. Prices range from $50 to $200, depending on your state. In California, the cost is $70.
How to file Articles of Organization?
There are some basic steps to filing your articles of organization. See below for the steps for the California filing process.
Step 1: Visit your secretary of state's website
Many states have a fill-in-the-blank articles organization outline on their websites so you don't have to write one from scratch. There may also be the option to file the form online. If filling out a printed form, make sure to write legibly and use black or blue ink only. The California articles of organization link for mail and in-person methods can be found here. However, if you would prefer faster service, it is recommended to fill the application online.
Step 2: Gather necessary information.
Ensure you have all the information you need on hand to ensure efficiency in the filing process. Below is some of the information you may need.
- Start brainstorming your LLC name and have one ready once you file. This is necessary when registering your LLC.
- You need to provide a physical address for your LLC when filing. A PO box may be insufficient, depending on the state you're filing with.
- You may opt to hire an agent to receive your legal paperwork for your business. This can include process notices, government correspondence, and compliance-related documents.
Step 3: Provide additional information
You may be asked for additional details regarding your business including organization management and operations information. These can include the following:
- Business Purpose. Some states may want you to describe the purpose behind your LLC. This includes California.
- Management outline. You may need to describe the management of your business, including whether the manager will be a single individual or a group of people.
- In certain states, including California, you may be required to provide additional information on the LLC's members including addresses and names. There is no limit on the number of members you can list. You may also need to get your papers notarized in certain states. In California, you do not need to have this done.
Step 4: Send in your form
Once you've completed the articles of organization, you can submit your form either through mail with the attached fee or electronically (if available in your state). In California the online application is located here, on the California Secretary of State website.
There is a nonrefundable fee of $70 so make sure to double-check that you completed the paperwork correctly, including all the necessary signatures. An authorized representative of your LLC must be the one to sign the documents.
Mail to:California Secretary of State
Business Entities Filings
PO Box 944228
Sacramento, CA 94244-2280
Submit in person to:Secretary of State
1500 11th Street
Sacramento, CA 95814
The current processing times can vary depending on volume. Click here to see updated time frames you can expect to receive your LLC ruling.
Expedite processing is available but only if you submit in person. If you turn in your paperwork to the Sacramento office, see below for options for expedited processing in California.
- 4- hour: $500
- Same day: $750
- 24-hour: $350
Additional steps after filing your Articles of Organization:
In California, 90 days after you file your articles of organization, you need to submit Form LLC-12. This form is also referred to as your initial statement of information.
- Obtain an employer identification number (EIN). This is provided through the IRS and is used to identify the company. It is necessary to open a business banking account, get a business license, and file a business tax return.
- Create an operating agreement. Although not required by all states, it is recommended to ensure that your business runs smoothly. It outlines the decision-making process and includes regulations and rules of your business.
- Open an LLC bank account. This is the first step to establishing business credit. It makes overseeing your finances more manageable as all expenses are now in one place.
- File for a business license. Depending on your state's regulations and your business type, you may need a business license. This will ensure compliance with laws and regulations for your area. It may be available online or you can reach out to your city's licensing authority.
- Annual report filing. This keeps your LLC in good standing and preserves your limited liability protection and other benefits.
- If changes are needed, you can amend or restate your California Articles of Organization.
What are some reasons my Articles of Organization may be rejected?
The secretary of state may reject your application. The reason is usually concerning the LLC suggested name. Other reasons may include if you forgot to pay the application fee. Make sure to include the fee in your application. The check must also be made payable to the right division where the filing is being sent. Another reason can be that you forgot to include the good standing certificate from California or whichever state that you are submitting your documents to establish your LLC. It is also important that your papers are complete and legible. If your writing is incomplete or cannot be understood, you are at risk of being rejected. The documents must be signed by a member of the LLC, manager or authorized person.
How can a lawyer help submit the Articles of Organization?
Many hire business lawyers to assist them during this process. Although you are not required to go through an attorney, it may be helpful to have an expert navigate the state-specific laws and streamline the process. With the help of an attorney, you can determine whether it is necessary to file for an LLC and if it’s the appropriate business structure for your company. You can process them faster with legal assistance. You also can avoid the stress of having to make any corrections and forfeiting the nonrefundable fee by having your lawyer navigate through the complicated process correctly the first time.
Your attorney can help you file your articles of organization. It will get rid of any stress from figuring out how and where to file, your business’ name, the things you need to do after filing the articles, and others as well. You should work with an attorney if you are having difficulties filing and would like clarification and a streamlined process to registering for an LLC.