Articles of organization are legal documents necessary for a limited liability company to establish. They are drafted and filed with the secretary of state in Delaware and outline all the rights, duties, powers, obligations, and liabilities of each member of an LLC.
What are Articles of Organization?
The articles of organization are an important part of establishing an LLC. Without them, it can be difficult to prove eligibility for limited liability status in court. They can also help to govern actions between an LLC and its members.
What is their purpose?
Filing the articles of organization is important because they form the LLC. In the state of Delaware, there is a $90 filing fee, but this is what legally forms your LLC. The articles of organization are called by a different name in some other states.
The purpose of the articles of organization is to generate an outline about your company. Every state has different requirements for what needs to be included, but generally, they explain the purpose of your LLC, as well as list all members and managers involved.
This document is necessary in order to establish a legal LLC. Without them, it is not possible to obtain an EIN, which means you cannot set up a business bank account, apply for business loans, or create a legal identity for the company.
Information Included in Articles of Organization
Incorrectly filing can result in a penalty or fine to your business. Make sure you include all the information necessary by following this list.
- Company Name: The company name is whatever unique name you chose to name your Delaware LLC.
- Statement of Purpose: Whether your business sells bicycles, is a holding company, or offers a service, this is your purpose.
- Duration: Some LLCs have a goal and temporary duration, this should be stated whether or not the LLC is finite or infinite.
- Place of business: This should be the mailing address where principal business will take place.
- Registered Agent: Every LLC must have a registered agent, and this is someone that accepts documents and important tax information on behalf of the company. The registered agent of a Delaware LLC must have an address in the state, and be able to accept due process when necessary.
- Management: Information about company owners, managers, and officers.
Articles of Organization vs Articles of Incorporation
There are articles of incorporation and articles of organization, but they are completely different. The content of the articles of organization and the articles of incorporation do seem similar, but they have different purposes.
The articles of organization are used in order to form the LLC. On the other hand, the articles of incorporation are used to create a corporation. They are completely different business entities.
How Much Does it Cost to File Articles of Organization in Delaware?
In Delaware, the cost to file the articles of organization is $90. This is required when you register as an LLC in the state of Delaware, to be paid to the secretary of state.
How to File Articles of Organization
If you are filing the Articles of Organization for your business you want to make sure you fill out everything correctly. Here’s a list of what you need to include in your Articles and how to file them.
The name of a Delaware LLC must include the words “Limited Liability Company”, “LLC”, or “L.L.C”. It must also be completely unique within the state of Delaware.
The street address of your principal place of business should be listed, as well as the mailing address if it is different.
List Your Registered Agent
In the state of Delaware, every business entity must have a registered agent. The registered agent must live and have a physical address in the state of Delaware. They must also be available during business hours and be over the age of 18.
List Managers and Members
You must include the names and addresses of each person authorized to make management decisions or owner decisions for your LLC.
List Effective Date
The date that an LLC begins to operate is considered the effective date. This is usually the same day that your filing is accepted. Although, you can choose a different day, which would be five days prior to when the Department of State receives the filing or up to 90 days after.
Send to Delaware Secretary of State
Once you are finished filling out the paperwork you send it to your secretary of state. In Delaware, Articles of Organization can be filed online, in person, by mail, or by fax. Filing online one costs $90 and is a much faster process than mailing or delivering them in person.
Reasons Articles of Organization may be rejected
There are a few reasons why the articles of organization of your LLC will be rejected. Articles may be rejected because of an issue with the name you originally chose, or because you did not send the $90 fee along with your file. There are also other legal formalities that you may have made a mistake in submitting. In some situations, you may need to wait weeks to get a response.
How a Lawyer Can Help Submit Articles of Organization
Filing the articles of organization is an essential part of forming a limited liability company. Although the process of forming an LLC is a long process, it is something that everyone has to do. It turns an idea into a real business. Hiring a lawyer will help you ensure that everything is done correctly. You can avoid making mistakes that may cause your process to be delayed. By hiring a lawyer you will file correctly the first time, and be one step closer to operating as an LLC with limited liability protection.