What Business Formation Documents Do LLCs Need?
What is an LLC?
An LLC, or Limited Liability Company, is a business entity that is created by state statute and offers its owners personal liability protection while providing them with the flexibility to choose how their company is taxed.
LLCs are relatively easy to set up and maintain, and they can be a good choice for small businesses and entrepreneurs who want the benefits of both a corporation with the ease of administration of a sole proprietorship or general partnership.
Related: What is an LLC?
Benefits of forming an LLC
One of the biggest advantages of an LLC is that it offers its owners limited liability protection. This means that if the LLC is sued or can’t pay back creditors, the owners’ personal assets are not at risk. There is one note here, in that if the owners sign a personal guarantee when obtaining bank funding (which is almost always a certainty), they will still be responsible for paying back the debt.
In addition, LLCs offer their owners more flexibility than any other entity when it comes to taxes. While some LLCs choose to be taxed as corporations, others elect to be taxed as sole proprietorships or partnerships. This flexibility also allows LLCs to change how it’s taxed as the business grows.
Related: What is the benefit of an LLC?
What business formation documents do LLCs need?
There are a few key business formation documents that LLCs need in order to get started.
1. The first is the Articles of Organization, (also referred to as a Certificate of Formation) which is a document that is filed with the Secretary of State (or similarly named state agency that is responsible for LLC registration) in order to officially create the LLC. The Articles of Organization typically include the LLC’s name, registered office address, names of its members, and contact information for the registered agent. In some states, the Articles of Organization must also include the LLC’s business purpose.
2. The second is the Operating Agreement, which is essentially a contract between the LLC’s owners that outlines how the company will be run. The Operating Agreement is not required in all states, but it’s a good idea to have one regardless of where your LLC is located.
This document details the ownership and management structure of your LLC, as well as the rights and responsibilities of each member, and having a written Operating Agreement can help to prevent disagreements between members.
3. The third is the EIN, or Employer Identification Number, which is a number that is a nine-digit number assigned by the Internal Revenue Service (IRS) to identify the LLC for tax purposes.
Not all LLCs will need an EIN. Single-member LLCs with no employees can use the owner’s social security number.
4. Last, if an LLC is operating under a fictitious name, is to obtain the documentation that the LLC is operating under a fictitious name. The fictitious name form (also referred to as a DBA, Doing Business As, Trade Name, or Assumed Name) is filed with the same agency the LLC’s Articles of Organization are filed.
Where should I store my company formation documents?
Once you have collected all of the business formation documents that your LLC needs, it’s important to store them in a safe place.
We recommend keeping a physical and digital copy so you can easily access these documents when needed. Common uses for these documents include opening a business bank account, credit card account, or merchant account, and to apply for business licenses.
What is a Certificate of Good Standing?
A Certificate of Good Standing is a document that proves that your LLC is in compliance with state law and is in good standing with the state. To get a certificate of good standing, you’ll need to request one from your state’s Secretary of State office.
The certificate will list the date your LLC was formed, the names of the LLC’s members and managers, and the registered agent’s name and address. A certificate of good standing is often required when you’re applying for business licenses, permits, or contracts.
I have lost my company formation documents, can I get replacements?
If you have lost your company formation documents, don’t worry – you can usually get replacements from the agency where you originally filed them.
There may be a fee to get replacement copies, and you will likely need to submit a request in writing.
If you have any questions about getting replacement copies of your business formation documents, we recommend contacting an attorney or the agency where you originally filed them.