A limited liability company, or LLC, is not an incorporation, hence it would be inappropriate to call its organizing document articles of incorporation. An LLC does have an organizing document, however, which must meet the statutory requirements of the state in which it is filed. The two types of documents have many shared or similar features.
Articles of Organization
In many states, the only document required to create an LLC is an "articles of organization." While you can hire a lawyer or draft the articles yourself, FindLaw notes there is usually a form available from the secretary of state that can simply be filled out and submitted. Usually one of the members acts as organizer and someone acting as manager must also sign the document. There is generally a processing fee of about $100 to $200 for submitting articles of organization, and some states allow expedited online filing.
Read More: What States Require Articles of Organization for an LLC?
States that recognize the LLC as a legal business entity have statutes that describe the information that must be contained in its articles of organization. According to Medlaw Plus, the document must designate a registered agent to receive service of process in the state and an office where she will be available. The articles must state whether the business is to be operated by the members or if non-member managers will oversee the day-to-day business of the LLC. Some states also require a statement of the company’s legitimate business purpose.
The articles of organization must also contain the legal name of the business, which must conform to state parameters generally requiring the inclusion of the phrase “limited liability company” or an appropriate abbreviation thereof. States also usually require the name of the business to be unique. Due to the cost and time involved with submitting articles of organization, Medlaw Plus recommends conducting a search of fictitious names registered with your state’s secretary of state. Knowing that your desired name is available prior to filing your articles of organization can save you time and money.
Usually, the state does not require filing of an operating agreement, but some do. Even if not required, most LLCs have an operating agreement that acts like bylaws for a corporation. In other words, the operating agreement is like a contract between the members and between the members and managers that outlines mutual rights and responsibilities. FindLaw suggests making an operating agreement because it can prevent future misunderstandings or provide protection if conflict ensues.
Joseph Nicholson is an independent analyst whose publishing achievements include a cover feature for "Futures Magazine" and a recurring column in the monthly newsletter of a private mint. He received a Bachelor of Arts in English from the University of Florida and is currently attending law school in San Francisco.