Establishing your business as a new limited liability company (LLC) is relatively simple and cost-effective. Since an LLC is a separate entity, you can’t be personally liable for its debts. That means creditors can’t go after your personal assets to pay the LLC’s debts and obligations.
However, to enjoy the advantages and legal protections of an LLC, you must register your company in the state where you’ll conduct business. The registration process involves filing articles of organization.
Also commonly known as a certificate of organization or a certificate of formation, the LLC’s articles of organization are an official document outlining important information and operations of the business. Crafting this document establishes the legal framework for your company.
This article covers the importance of articles of organization and why a lawyer’s expertise and guidance are essential when filing one for your LLC.
The Importance of Filing Articles of Organization for Your LLC
An LLC is only legally recognized once you file articles of organization and have the documents approved by the state.
The primary purpose of such documents is to define the details of your LCC at the state level. These may include the LLC’s powers, duties, and obligations. They also contain particulars about where to send lawsuits and legal notices to the company.
The Secretary of State uses the information outlined in the articles of organization to decide whether to approve your company and authorize it to conduct business as an LLC. Anyone planning to form an LLC is required to prepare and file these formation documents.
Requirements for articles of organization may differ slightly from one state to another. Some may not require you to write the documents from scratch. Instead, they may provide fill-in-the-blank forms to complete and submit.
For instance, states like California require you to provide the name and address of your registered agent when filing your articles of organization. A California registered agent can be a person or entity who agrees to receive all legal and business communications on behalf of the LLC.
Suppose you wonder how to find a registered agent in California. A quick Google search will provide you a list of selections. However, ensure you work with an individual or company with decades of experience.
After submission and approval, the articles of organization establish the legal existence of your LLC as a registered business entity in the state.
Why You Need a Lawyer When Filing Articles of Organization
The expertise and guidance of lawyers ensure accuracy and compliance in drafting relevant aspects of the LLC’s articles of organization. Specifically, many individuals filing the articles of organization seek a lawyer’s assistance for the following reasons:
Evaluate your business’s legal needs
The articles of organization specify the internal structure and operations of the LLC. Having a lawyer ensures that your business’s legal requirements are met. They can also delve into your business’s specific circumstances and align legal structures accordingly.
Ensure adherence to the state’s regulations
The rules and requirements for an LLC’s articles of organization can vary from one jurisdiction to another. One commonly required piece of information is the state law under which the LLC will be established.
The state law spells out the statute number authorizing LLCs to operate. Reviewing the state’s rules and regulations is crucial before filing the document. An experienced lawyer can adequately guide you and ensure adherence to the state’s laws.
Comply with industry-specific regulations
You’re typically required to file articles of organization with the state government. However, many counties and cities have corresponding business licensing and zoning requirements. Meeting the specific requirements for the area where you intend to form your LLC is vital.
Similarly, some industries, particularly healthcare or finance, may have unique and complex legal requirements. A lawyer with industry-specific knowledge and experience can assist you in ensuring that the LLC complies with those regulations.
Navigate the complexities of intricate structures
LLCs can operate under the management of members or separate managers. In many states, specifying the type of management you will apply for your LLC is mandatory.
A lawyer can walk you through the complexities of filing articles of organization for intricate structures like multi-member or manager-managed LLCs. They can help ensure accurate documentation, as standard templates may not cover the provisions for these structures.
Structure the LLC for tax-efficiency
Forming an LLC may have tax implications. For instance, an LLC with two or more members will be subject to taxation as a partnership. With a qualified lawyer, you can make informed decisions and structure the LLC for tax efficiency.
A lawyer specializing in tax law can ensure that the articles of organization consider tax obligations and structure them to optimize the company’s tax benefits. They can also help minimize errors that can result in unintended tax consequences.
Acquire guidance on asset protection
The articles of organization may include provisions on protecting personal assets from the company’s liabilities. A lawyer’s expertise will be valuable in structuring your business and drafting the articles of organization to maximize asset protection.
Avoid errors when crafting LLC articles
Filing articles of organization to set up a new LLC doesn’t guarantee automatic approval from the state. Errors in the document can cause legal issues or delays in the LLC formation process. The state may reject your application for the following reasons:
- Failing to include the required information, such as the LLC name, members or managers, purpose, registered agent, and duration
- Selecting a name that doesn’t adhere to the state’s naming requirements
- Not including the filing fees in the application
- Providing incomplete or ineligible information in the articles of organization
- Not creating an operating agreement with the articles of organization
- Failing to adhere to the publishing requirements in the state
You can avoid these mistakes by seeking legal advice from a qualified lawyer. With a lawyer, you can be confident in meeting all legal requirements and preventing errors in drafting the articles of organization.
Conclusion
Meeting the requirements for articles of organization is crucial when starting an LLC. These prerequisites establish the necessary legal framework and verify the company’s ownership.
Accomplishing this process efficiently and on time is vital to protecting the company’s owners and its potential for growth.
Hiring a lawyer for articles of organization may come with a cost. But their guidance will give you peace of mind and additional legal assurance that you will establish your LLC successfully and in accordance with the law.
