Articles of organization: Overview, definition, and example
What are articles of organization?
Articles of organization are formal legal documents that are filed with the state government to legally establish a Limited Liability Company (LLC). These documents serve as the foundation for the LLC’s existence and outline important information about the company, including its name, business purpose, duration, registered agent, and management structure. The filing of the articles of organization is typically one of the first steps in forming an LLC, and it legally registers the company as a separate entity under state law.
For example, when a group of entrepreneurs decides to start a business and choose to form an LLC, they must file articles of organization with the Secretary of State in the state where the business will operate.
Why are articles of organization important?
Articles of organization are important because they provide the legal framework for the LLC’s formation and operation. Filing the articles with the state is necessary to ensure that the LLC is recognized as a separate legal entity, which helps protect the personal assets of the owners (members) from the company’s liabilities. The document also provides essential details about the business structure, which helps prevent future misunderstandings or legal issues.
For businesses, filing the articles of organization is crucial for achieving limited liability protection, establishing credibility, and complying with state laws. For entrepreneurs, this step formalizes their business operations and ensures they meet all regulatory requirements.
Understanding articles of organization through an example
Imagine a group of four friends who want to open a small restaurant and choose to form an LLC to limit their personal liability. They must file articles of organization with the state to legally establish the restaurant as an LLC. The articles will include the restaurant’s name, the names of the owners (members), and the name of the registered agent who will handle legal documents. Once filed and approved, the LLC is officially formed, and the owners are protected from personal liability for business debts or legal claims against the company.
In another case, an entrepreneur who wants to start an online business may choose to file articles of organization to create an LLC for their e-commerce store. The articles will detail the purpose of the business, such as selling goods online, and list the LLC’s management structure—whether the business will be managed by the owners or a designated manager.
An example of articles of organization clause
Here’s how a clause like this might appear in the articles of organization:
“Article I. Name: The name of the limited liability company is [Business Name]. Article II. Duration: The duration of the limited liability company shall be perpetual, unless dissolved by the members in accordance with state law. Article III. Registered Agent: The registered agent for the service of process is [Registered Agent Name], located at [Address]. Article IV. Purpose: The purpose of the LLC is to engage in the business of [Business Purpose].”
Conclusion
Articles of organization are essential legal documents that officially establish an LLC and define the company’s structure and operations. Filing the articles with the state provides legal recognition, limits personal liability, and allows the company to begin operations. For entrepreneurs, understanding and properly filing the articles of organization is an essential step in forming a business and ensuring compliance with state laws.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.