Certain documents must be filed in the incorporation process. This paperwork allows entrepreneurs to form a corporation or a limited liability company (LLC). A business that is incorporating as a corporation must file articles of incorporation. Companies that are forming an LLC file articles of organization.
What are articles of organization? Is there a difference between articles of incorporation versus articles of organization? Let’s define the two types of documentation, their basic information, and frequently asked questions as it pertains to incorporated businesses.
Articles of Incorporation
What are articles of incorporation?
Businesses that would like to be established as a corporation must file articles of incorporation. This is a requirement within your state of formation and for businesses that chose a corporation as their business entity. Once the Secretary of State has received and processed articles of incorporation, the information in the application becomes part of the corporation’s public record.
What should be included in articles of incorporation?
How does an entrepreneur write articles of incorporation? Typically, this is a form that entrepreneurs can download and fill out from the Secretary of State’s office. It includes basic information about the corporation. This may include, but is not limited to, answering the following questions.
The name of the corporation.
Physical, and mailing, address of the corporation’s principal office. (This must be a street address as a P.O. Box does not count.)
The number of shares the corporation has the authority to issue. Some articles of incorporation may also request the par value of each share.
Name and street address of the registered agent.
Primary purpose of the corporation or purpose for which the corporation is formed.
Name(s) and street address(es) of the incorporator(s).
The date, print name(s) of the incorporator(s), and signature(s).
Remember that every state of incorporation is different. Some states may require more information about the corporation in their articles of incorporation. For example, this may include checking off boxes that state how the corporation is organized such as non-profit, non-stock, or for profit. Questions may also be asked about whether the corporation will have members or elect to be organized for purposes as a benefit corporation. Make sure to answer each question accurately. Review with all other incorporator(s) before signing the document.
Where do I file articles of incorporation?
Are you ready to file articles of incorporation? It’s wise to check in with the local Secretary of State before submitting the form. Articles of incorporation are accompanied by a filing fee. Checks, money orders, and credit cards may be used to pay this fee. It is still a good idea to check in with the Secretary of State and make sure you are using an accepted form of payment. If there is a designated party that the payment should be made towards, make note of that when writing out a check.
Additionally, the Secretary of State will outline the way in which you may file articles of incorporation. Most offices have walk-in drop offs (side note—these may be limited due to COVID-19), fax, and online filing options available to entrepreneurs.
Articles of Organization
What are articles of organization?
If an entrepreneur chooses to form an LLC, they will need to file articles of organization.
Articles of organization share some similarities with articles of incorporation. This document contains basic information about businesses that wish to be established as an LLC. It is required in most states of formation to file articles of organization if you choose an LLC as your business entity. Articles of organization must also be filed prior to conducting business as an LLC.
What should be included in articles of organization?
Articles of organization includes basic information about the LLC, answering the following questions.
Name of the limited liability company.
Street and mailing address of the principal place of business of the LLC. (Some articles of organization ask for this information separately, as some LLCs may have different street and mailing addresses.)
Effective date of filing.
Name and street address of the LLC’s registered agent.
Name(s) and address(es) of the LLC’s member(s).
Whether the LLC will be vested in members or managers. An LLC may be formed under one of three LLC structures. These include a single member LLC (which is a standard LLC), member managed LLC, and manager managed LLC. Typically, there is a box that can be checked off on articles of organization that alerts the state about the LLC’s structure status.
Name(s) and address(es) of the LLC’s member(s) if member managed or managers if manager managed.
Date, print or typed name(s), and signature(s) of person(s) forming the LLC.
Similar to that of filing articles of incorporation, articles of organization may come with additional questions. Some states may request more information about whether the LLC is an at-will or term company. Others may wish to know if the LLC is a veteran-owned organization or the purpose for which the LLC is formed. This will vary depending on the state so be mindful to include the proper answers to these questions. Review the answers with the LLC’s members prior to filing the application.
Where do I file articles of organization?
Are you ready to file articles of organization for the LLC? Prior to filing the completed application, check in with the local Secretary of State. Similar to articles of incorporation, articles of organization are also accompanied by a filing fee. Checks, money orders, and credit cards may be used to pay this fee. Review with the Secretary of State beforehand to make sure you are using an accepted form of payment and making the payment out to the appropriate point of contact.
Additionally, the Secretary of State will outline the way in which you may file articles of organization. Most offices have walk-in drop offs (side note — these may be limited due to COVID-19), fax, and online filing options available to entrepreneurs.
Frequently asked questions about incorporation
You have learned what it means to file articles of incorporation for a corporation and how to file articles of organization for an LLC. Both of these filings, while similar in requesting information, do fulfill different purposes for their respective business entities.
However, there are still a few questions entrepreneurs have about these articles. Below you will find answers to commonly asked questions.
Does a sole proprietor need articles of incorporation?
No. Articles of incorporation are necessary to file for businesses that would like to be established as corporations. Sole proprietors have the least amount of paperwork and filing responsibilities due to the nature of their entity formation. A sole proprietor is an unincorporated entity. Sole proprietorships may draft a business plan for their company, for example, but have fewer filing requirements than incorporated businesses.
Does a nonprofit need articles of incorporation?
This depends on the nature of the nonprofit entity. If you are filing as a nonprofit corporation, for example, you must complete articles of incorporation for domestic nonprofits.
Filing articles of incorporation for nonprofit corporations is quite similar to that of filing for a corporation. You will need to include the name of the nonprofit corporation, information about the nonprofit’s street address and registered agent, and print names and signatures of authorized officer(s).
The purpose of the corporation, however, will differ to fit the nonprofit’s needs. Often, most of these filing documents require you to check off if you are filing as a public, mutual, or religious nonprofit corporation. It’s also important to note that the filing fees for nonprofit corporations and their articles of incorporation tend to be slightly less expensive than those for corporations. Check in with your local Secretary of State to find out how much you may expect to pay for a filing fee.
Are articles of incorporation confidential?
The information in an articles of incorporation application becomes part of the corporation’s public record. As such, the information provided is not considered confidential for corporations.
Deborah Sweeney is the CEO of MyCorporation.com which provides online legal filing services for entrepreneurs and businesses, startup bundles that include corporation and LLC formation, registered agent services, DBAs, and trademark and copyright filing services. You can find MyCorporation on Twitter at @MyCorporation.