The limited liability company, or LLC, is a hybrid business entity that combines features of corporations and partnerships. To differentiate the LLC from these other entities, many states refer to the founding document of a limited liability company as articles of organization, since, technically, the business is not incorporated. Some states have different names for the document. For example, Texas refers to it as a certificate of formation. In general, the information that must be provided is consistent. It's important, however, to review the requirements of your state.
The first article of an LLC's articles of organization provide the name of the company. Usually the words "Limited Liability Company," or the abbreviation "LLC," must appear in the legal name of the entity. The words "Limited" and "Company" can generally be shortened to "Ltd." and "Co.," respectively. A search of the state's names database should be conducted prior to drafting the articles of organization, since a name that's too similar to one already in use can delay the creation of the company.
Registered Agent and Address
Each state has its own requirements for a registered agent and physical address. Delaware, for example, does not require a physical address inside the state. Most do, however, and stipulate that the address cannot merely be a mailbox or phone answering service. The registered agent is the person or entity authorized to receive lawsuits or other legal documents on behalf of the business. This can usually be either an individual or a business, but a business cannot typically act as its own registered agent.
Members, Managers and Shares
The owners of an LLC are called members. The names and addresses of the members generally must be provided in the articles of organization, but some states allow just one to be named initially. A manager is a person who acts in an executive capacity for the business, and who might not be a member. Some LLCs are member-managed and therefore do not have separate managers. For each member named, her ownership interest in the company should be given as a percentage.
Purpose and Duration
Some, but not all, states require an LLC's articles of organization include a statement of the business' purpose and/or its duration. A company can be designated as having a perpetual duration, or some specific date or amount of time can be provided for its automatic termination. For purpose, it's usually permissible to simply declare any lawful business purpose. However, a state might require more specificity to qualify for a welfare or public purpose tax exemption.
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.