of organization
• Merger
• Sale of assets
• Dissenting owners’ rights
• Dissolution
• Authority of foreign LLC to transact business
• Consequences of transacting business without authority
• Application for authority to transact business
• Amendment to application for authority
• Name of foreign LLC
• Registered office and agent of foreign LLC
• Change of registered office or agent of foreign LLC
• Resignation of registered agent of foreign LLC
• Service of process on foreign LLC
• Withdrawal of a foreign LLC
• LLC records required
• Inspection rights of owners
• Scope of owners’ inspection rights
• LLC annual report
• Penalty for signing a false document
Checklist: Frequently Filed Documents
Your secretary of state requires LLCs to file certain documents. These documents will usually include the following:
• Request to reserve LLC name (optional)
• Fictitious name reservation, aka assumed business name
• Articles of organization
• Amendment to articles of organization
• Annual report
• Change of registered office or registered agent
• Request for certificate of good standing
• Application for certificate of authority
• Articles of merger
• Articles of dissolution
• Application for withdrawal of certificate of authority
• Appointment of secretary of state for certificate of service
• Application to reinstate LLC charter
CHAPTER 2
Articles of Organization
In terms of importance and ultimate authority, your state’s limited liability company act has first priority, your articles of organization are second, and your operating agreement is considered third. In the event of a conflict between the articles of organization and your state’s act, the act will control. If a conflict exists between the articles and the operating agreement, the provision in the articles will prevail.
This book is intended as an operations manual, so you may already have filed your articles of organization. If so, you may want to skip this chapter.
The life of an LLC begins with the preparation and filing of articles of organization. Typically a one-page document, the articles of organization set out the following basic information:
• The name of the LLC
• The name and address of the agent for service of process, the person or entity authorized to receive legal papers on behalf of the LLC
• A statement of the LLC’s purpose
• Declaration as being member-managed or manager-managed (required by some states)
• Name of at least one member or manager (required by some states)
To form an LLC, you file articles of organization with the secretary of state or equivalent department. See the State Reference Information on the accompanying CD for contact information for the appropriate department. With the articles, you must also submit a filing fee, which differs by state.
Use the Secretary of State’s Model Articles of Organization
The best place to start in preparing your articles of organization is to visit the secretary of state’s web site in the state in which you want to organize. In most cases, these sample articles will be all you need.
▼ Expert Tip
Don’t file organization papers in the closing weeks of a fiscal year, such as in the last weeks of December—you may be required to file tax returns for the entire year. Wait until January 1 to file your organization papers.
In the past few years, many states have offered fill-in-the-blank articles. The use of such forms is now mandated in several states, most notably Nevada. Bear in mind that fill-in-the-blank forms are going to offer only the minimum. If you have additional clauses that you wish to add, such as additional classes of ownership or specific limits on the liability of officers and managers for actions on behalf of the LLC, you’ll need to add those clauses on continuation pages.
▼ Expert Tip
You can usually pick your date of organization. If you would like a special date, such as January 1 or a birthday, contact the secretary of state’s office in the state in which you intend to organize. Almost all states will let you designate a special date of organization when you file.
Expedited Service May Be Available
If you want to form your LLC immediately or at least very quickly, some states offer expedited service available for an additional fee. Delaware and Nevada, where organization is a cottage industry, both offer expedited filing. Nevada offers a 24-hour service for an additional $100. Delaware goes further: it offers the fastest organization in the country, with 24-hour service for $50, same-day service for $100, two-hour service for $500, and one-hour service for $1,000.
WHAT INFORMATION SHOULD YOU INCLUDE IN YOUR ARTICLES?
Your articles of organization should include all the required items listed above, as well as any of the optional items that are required by your state. Next, determine how much information you wish to make public.
Don’t Disclose the Unnecessary
As a general rule, don’t appoint initial members or managers in your articles of organization—except if the state requires it, such as Nevada. And, generally,
