Fact checked for accuracy by Billie Anne Grigg, a bookkeeper and Mastery Level Certified Profit First Professional.
Have you heard that you need an LLC organizer to help with keeping your limited liability company running smoothly?
Most likely, you’ve heard about other popular LLC roles such as a manager, member, and owner.
The organizer role isn’t one that’s talked about as often as some of the others.
An LLC organizer does play an important part in keeping your company fully in compliance with your state’s rules, however.
In this article, you’ll learn what an LLC organizer is and how the role differs from a manager or member.
An LLC organizer performs a role that the name implies. The organizer gets put in charge of filing the LLC formation paperwork that your state requires before recognizing your company’s business structure.
In effect, the organizer helps your limited liability company get organized as it starts legally conducting business.
The startup documents are typically called the Articles of Organization in most states. Once the paperwork gets filed properly, the LLC organizer hands power back over to the LLC’s members.
While this relinquishing of power sounds quite official and serious, you should know that the organizer of an LLC typically ends up being one of the company’s members or owners.
Your limited liability company’s Articles of Organization state your company’s basic details. You wouldn’t be wrong to think of this documentation as the LLC’s birth certificate.
Don’t confuse the Articles of Organization with your LLC’s operating agreement. An operating agreement isn’t required in all states. It’s not a legally binding document.
However, the Articles of Organization is a legal document. It sets forth specific obligations between members as the state legally recognizes the LLC’s formation. These obligations include the following factors between members, as well as between members and the LLC itself:
Acceptance of the Articles of Organization cements your company name with the state and officially registers the LLC.
It’s required that the organizer file the documents, make sure everything meets state law and that it’s all done promptly.
You might wonder what the difference is between the LLC organizer and its members or managers. You now know the definition of an organizer. Let’s do the same for a member and manager.
An LLC member is typically a company owner. Members are in charge of the company’s management, obligations, debts, and operations. The LLC’s operating agreement lists specific responsibilities and duties of each member.
Some members can have passive roles. These might be people who invest capital into the business but don’t have any day-to-day role in the management of the company.
Other members will play an active daily role in operating the LLC. You’ll often hear these members called managing members because they’re playing a direct management role. Their tasks might include making purchase orders or signing contracts.
An LLC manager is a person, entity, or group in charge of managing the business’s daily operations. The LLC’s members choose the manager(s). The LLC can hire a manager from outside the company, or the LLC’s members can serve as managers.
As we stated above, you can serve as your LLC’s organizer. Most states simply require that an organizer must be a person over the age of 18. Here are people who can become the organizer of your LLC:
- You or another LLC member
- An accountant
- A friend or family member
- An attorney
- A document filing company
- The LLC’s registered agent
There’s an interesting aspect to filing LLC paperwork with most states. Often, you’ll notice that the documents required to form an LLC have room for one, or possibly two, names for the organizer(s).
This confuses some owners who fill out their own paperwork because they wonder where all the member names go when filing for a multi-member LLC.
Many states don’t care to have the names of the members. Those names go in the LLC’s internal operating agreement document. They don’t care who the members are or whether the LLC has one for fifty members. The state simply wants the organizer’s name so that it can make contact in the event of a filing error.
Note that it’s a different process from state to state. Some states do want all members listed. That’s why you need to check in with your state’s laws and requirements.
Yes, in most states, the registered agent can perform the organizer’s duties. Your specific state has regulations surrounding the issue of the same person or entity acting as both organizer and registered agent. Since you need to use a registered agent anyway, you might find that they’re already familiar with filing formation paperwork for LLCs. If you don’t have a registered agent yet, you can read about our top picks for the best registered agent service for recommendations.
Anyone you give authorization to can turn into the LLC organizer.
Should you select an organizer for your LLC without much thought, however? That’s not a wise decision. Consider that an LLC organizer doesn’t retain any liability if they make a mistake when filing with the state. Make sure to choose someone you can trust to perform the duty correctly.
While you can perform the role of organizer yourself, you need to think about whether you feel confident doing so. If you don’t feel comfortable filing the LLC formation paperwork, then you can hire someone else to do it for you.
Hiring one of the many document filing companies that exist online doesn’t cost much money. These companies know the process inside and out because it’s something they do daily. You can get it all done professionally for a modest fee without worrying that any steps get missed.
Remember, you’re not giving these companies any important roles inside your business except to file your Articles of Organization. From there, you’re 100% in control of your company.
Another hiring option is to ask your accountant or attorney to take on the LLC organizer responsibilities. This path usually requires higher fees than using a document filing company, however. Most of these companies file the paperwork and then deliver you all your important LLC paperwork in a nice binder to keep it in.
The Last Word
As you can see, an LLC organizer performs a simple role. That role is an extremely important responsibility, however. You want to make sure mistakes aren’t made when filing with the state.
The surprising aspect of forming an LLC is how few legalities exist in most states. States just want someone to submit the paperwork without worrying too much about who that specific person or entity is. The bottom line is that your best path is to use a document filing company to act as your LLC organizer. Unless you’re familiar with the process and don’t have any reservations about doing it yourself, then the peace of mind acquired by hiring a professional formation service is typically worth the fee involved.
Filed under: Advice Columns