If you’re planning to incorporate a business in any state, you probably heard that companies are required to elect an LLC organizer. This crucial function has specific obligations beneficial for budding LLCs during the formation process. In this post, our team will explore all state requirements for this role so that you wouldn’t be left unaware of its duties and responsibilities.
What is an LLC Organizer?
Roles and Duties of an LLC Organizer
Before our team discusses the qualifications for LLC organizers, understanding the significance of its work and duties is a step that the members of limited liability companies must be informed about, particularly during the filing of documents with the state.
The primary duty of a limited liability company organizer is to prepare LLC formation documents for your company and file them to the appropriate state office. Remember that this business incorporation paperwork must include the identity of LLC organizers performing these functions.
The role may sound simple, but organizers of LLCs are tasked with a complex application process that could cost your business to pay penalties in the long run if documents aren’t filed correctly.
Who is Qualified to be an LLC Organizer?
Despite the complexity of the LLC formation procedures, the qualification requirements for LLC organizers are pretty simple. For states like Texas, as long as the appointed organizer is of legal age capable of entering into a contract [1], then LLC owners can elect that individual according to state law.
There are also cases where a company opts picking members of the LLC to be the organizer. These occurrences are typical for a single-member limited liability company.
However, if you’re not running the business alone, selecting a member of the LLC could impose a conflict of interest if the chosen LLC member has other business ventures. The same can be implied when picking a family member to function as your organizer.
Although it’s a great idea to seek assistance from attorneys, our team doesn’t see much significance in hiring them for these responsibilities besides getting great tax advice. Services offered by attorneys are also costly.
If business entity members are overwhelmed with the obligations of this role, our team recommends hiring a professional organizer with industry experiences like business lawyers and online business formation services.
There are LLC services like LegalZoom and Zen Business that you could entrust with your documents. Rest assured that they know the gravity of the role as they already handled application preparations and document filings for many customers.
Liabilities of an LLC Organizer
Upon being selected as an organizer of a limited liability company, you have no other liabilities or functions related to the LLC except overseeing the filings and ensuring that the ones you prepared are successfully submitted to the state agency.
However, the liability of an organizer may expand in the future. If the organizer is an LLC member-owner, it must be thoroughly disclosed how LLC members would benefit from profits when recruiting other LLC members.
Difference from an LLC Member and Registered Agent
Despite the common misconception, an LLC’s registered agent isn’t the same as an organizer. While an organizer has the absolute power of involvement in the incorporation process, this position is limited to that extent.
On the other hand, an registered agent service is an appointed representative that serves as the communication bridge of an LLC to the state. All states also require any LLC to select a registered agent because all notices from states will be sent through their physical address.
FAQ
Can I be my own LLC organizer?
Yes, you can be your own organizer. However, you’ll be tasked with crucial responsibilities like managing formation paperwork and filing fees that could incur penalties when handled disorderly. The application procedures may hinder company operations, so seeking assistance from a law firm or formation service is highly recommended.
What does it mean to be an organizer of an LLC?
To be an organizer of an LLC business entity means that you are elected as the person mainly responsible for managing formation documents such as filing articles of organization to the office of the secretary of state on behalf of the company. Ensuring accuracy is the job’s essential part.
Conclusion
Although the duties of an LLC organizer appear simple and easy, keep in mind that it’s as essential as hiring a registered agent. These requirements vary in different states, so we recommend going for online incorporation services. Compared to hiring an attorney, these providers offer both LLC application and registered agent needs at a lower expense.
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