4 Must-Have LLC Documents

If you’re considering forming a Limited Liability Company (LLC), you’re likely drawn to the business structure because it provides personal liability protection for the business owner, the simplicity of pass-through tax status, and ease of administration thanks to minimal ongoing compliance responsibilities. These advantages and others have made the LLC a top choice for entrepreneurs everywhere.

While it’s relatively uncomplicated to start a business as a Limited Liability Company, there are several important documents you must pay attention to when registering an LLC.

1. Articles of Organization

An LLC’s Articles of Organization are similar to a Corporation’s Articles of Incorporation. The Articles of Organization is the document states require business owners to file to establish an LLC.
Some states call the paperwork a Certificate of Organization or Certificate of Formation. Regardless of its name, the Articles of Organization is a registration form required by every state to establish an LLC as a legal statutory entity.
Most states allow business owners (or an authorized party acting on their behalf) to complete, file, and pay the associated fees for their Articles of Organization online. An attorney isn’t required to prepare an LLC’s formation documents. However, it can be helpful to get a lawyer’s guidance to ensure you’re aware of your legal responsibilities and risks.

Information included in the Articles of Organization:

• Business Name – Consider doing a name search before choosing your LLC name. It’s important to make sure your name doesn’t conflict with the name of another business already registered in the state where you’re filing your LLC. If your name is the same or very similar, the state may reject your filing, and you’ll need to resubmit your Articles of Organization using a different name — and pay the filing fee a second time!
• Business Purpose – In most states, you don’t need to describe your LLC’s purpose with much specificity. A template statement like “to engage in any lawful activity under state law for a limited liability company” is typically adequate.
• Principal Place of Business – States want to know the LLC’s primary address, and many require the physical address where the LLC conducts most of its business. Some exceptions apply.
• Registered Agent – A registered agent is an entity or individual authorized to receive official papers and legal documents on your LLC’s behalf, including renewal notices from the state and any documents related to lawsuits. Your registered agent must be located in the state where your LLC is registered, have a physical street address, and meet any other requirements your state has for registered agents. While some states will allow an LLC owner (a.k.a. member) to designate themselves, a family member, or an employee as their registered agent, doing so can compromise the individual’s privacy and create other issues (such as the embarrassment of being served legal papers in front of clients in the event of a lawsuit). Contracting a registered agent services provider can provide peace of mind, ensure all requirements are met, and avoid awkward situations.
• LLC’s Management Structure – Most states require LLCs to specify their management structure in their Articles of Organization. An LLC can be either member-managed or manager-managed. You may also need to provide the names and addresses of your members or managers.
• Business Duration – Some states’ formation paperwork asks applicants to specify how long the LLC will operate. Generally, you can indicate “perpetual” as the duration if you plan to operate your LLC indefinitely. If you’re registering your LLC in a state that has a statutory limit on how long an LLC may exist, you can request to extend your LLC if it’s still in business when you hit the end of that period.

2. LLC Operating Agreement

An LLC Operating Agreement is the governance document that outlines how the company should be operated and managed. It describes the rights and responsibilities of the LLC’s members, how profits should be distributed, how decisions should be made, and other important details. After all members sign the LLC’s operating agreement, it becomes a legally binding document and should be kept at the company’s principal office along with other critical business records. An LLC does not have to file its operating agreement with any state agencies. However, banks and investors may request to see an operating agreement before loaning money to an LLC.

What should you include in your operating agreement? That can depend on your type of business, whether you have one or multiple members, and other factors.

Here are some common elements included in LLC operating agreements:

• Members’ names
• Members’ initial contributions
• Members’ ownership percentages
• Management structure
• Managers’ names
• Member responsibilities and duties
• How profits and losses will be distributed
• Voting rights
• How ownership can be transferred
• Dispute resolution process
• Succession plan
• Dissolution procedures

Even if you are your LLC’s only member, I encourage you to consider having an operating agreement. A single-member LLC operating agreement can help reinforce the legitimacy of the business entity. It can also provide directions for what should happen to the LLC if its solitary owner were to die (if no agreement exists, the state’s default rules will apply).

There are no laws that say you need to have an attorney create your operating agreement, but it can be helpful to ask a lawyer to review your agreement after you’ve drafted it.

3. IRS Form SS-4

Any business that has employees must have a nine-digit federal tax ID known as an Employer Identification Number (EIN), and practically all LLCs (even those without employees) may need one for opening a business bank account, filing certain business taxes, or other purposes. There is no cost to get an EIN.

After an LLC is legally formed, its members can request an EIN by submitting Form SS-4, which can be completed online, by fax, or by mail. Alternately, a third party can prepare the Form SS-4 and receive an EIN on an LLC’s behalf by completing the Third Party Designee section and obtaining an LLC member’s signature on the form.

4. Beneficial Ownership Information Report

Starting in 2024, a beneficial ownership information (BOI) reporting requirement went into effect for most business entities, including LLCs, operating in the United States. The purpose of the BOI report is to inform the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Treasury Department, about who owns and benefits from a business entity (i.e., its beneficial owners). It also requests information about company applicants (the individuals who prepared and filed the business entity’s formation documents). The reporting requirement’s purpose is to make it more difficult for bad characters to get away with financial crimes, such as money laundering, drug trafficking, fraud, and other illegal activities.

The BOI reporting rule applies to both domestic and foreign companies that meet the criteria of a reporting company:

• A domestic reporting company is a corporation, LLC, or any business entity created through filing a registration document with a secretary of state (or similar) office under the law of a state or Indian tribe.
• A foreign reporting company is a corporation, LLC, or other entity formed under the law of a foreign country that filed a document with a secretary of state or any similar office to register to do business in any U.S. state or tribal jurisdiction.

If a business entity meets the above descriptions but falls under one of FinCEN’s 23 exemption categories, it may not be required to file a BOI report. 

Here are some important BOI Report filing deadlines to be aware of:

• Reporting companies created or registered to do business before January 1, 2024 must file an initial BOI report by January 1, 2025.
• Reporting companies created or registered on or after January 1, 2024 and before January 1, 2025 must file an initial BOI report within 90 days of the entity’s formation.
• Reporting companies created or registered on or after January 1, 2025 must file an initial BOI report within 30 days of the entity’s formation.

As long as the information on the initial BOI report is accurate and up to date, there is no requirement to file subsequent BOI reports. However, reporting companies must submit an updated BOI report if any of the information filed previously was incorrect or has changed. Reporting companies have within 90 calendar days after a change has been made or an error was detected to submit their updated BOI report.

LLC owners can file their BOI report for free using FinCEN’s BOI E-Filing System, or they can have a trusted resource (such as CorpNet, an accountant, or an attorney) file it on their behalf. After you successfully submit the BOI report online, I recommend downloading the report transcript and keeping it with your LLC’s other company records.

Other Compliance Considerations

Besides the four requirements I discussed in this article, you may have other responsibilities as well when starting and operating your LLC. The rules and regulations vary from state to state, county to county, and even city to city — and your LLC’s business activities and other factors can also affect your obligations.

Compliance items to watch for include:

• Initial reports and annual reports (required by several states)
• Business licenses and permits
• Professional licenses
• State payroll tax registration
• Sales & use tax permits
• DBA registration

It’s critical to research your state’s and local government’s requirements and seek professional guidance from legal and tax professionals if you are unsure of what you must do to create your business legally and maintain compliance on an ongoing basis.