What Is a Certificate of Organization?

Certificate of organization, sometimes referred to as articles or certificate of formation, is a document created in setting up a Limited Liability Company (LLC) which outlines the LLC as a company, its purpose, and the names of the initial members. This is usually a brief page of information.

Organization Compliance Certificate Example

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Example of Organization Gift Certificate

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Depending on which state the business or company is in, the required documents to be filed will differ. But for most, the following items have to be included:

  • The name of the Limited Liability Company (LLC).
  • Legal structure type of the LLC. This can be one of the following:
    • Limited Liability Company (LLC) – the corporate structure for LLCs are such that it makes use of taxation from partnerships or sole proprietorship combined with the limited liability of a corporation. This simply means that the entity or the company created avoids dividend tax and double taxation since only the owners or investors get to be taxed for the revenue of the corporation. These corporations or entities are in legal terms called flow through entities (FTE) or non-entities since the entity itself is not taxed but the individual owners or investors are. This is also beneficial for the owners since individually, they can show shares of income on their personal tax returns.
    • Professional Limited Liability Company (PLLC) – These entities are similar to that of LLCs but only differ in that the formation of such an entity cannot be done unless the forming members of such an LLC are licensed professionals in a state. This means that the type of business they engage in are those which provide professional services requiring state licenses. Examples of which are legal and medical entities.
    • Series Limited Liability Company – Also similar with LLCs but distinctly differ in that an LLC that has separate divisions treat each division or series as a separate division void of liabilities from another division or series but all under one entity or LLC. Creation of such a concept was due to ensuring or protecting personal assets from liabilities or legal claims in relation to an investment or business venture. Simply put, an SLLC separates each series from liability to each other thereby legally separating assets and operations of each series.
  • Management of the LLC. This is a document stating the management of such an LLC has to be included and stated if the members themselves hold managing positions or managers are hired for such.
  • The effective date of incorporation for the LLC.
  • Duration. By default an LLC is held in perpetual duration but can otherwise be specified within an agreed upon dates of duration.
  • Names and accompanying signatures of the incorporators of the LLC.

Summing it all up, the above mentioned items form the documents needed for filing for a certificate of organization to make an entity legally recognized. However, there are certain states that follow slight alterations to the requirements to be presented in the filing of such an application. It is recommended to consult the office of the secretary of state in the filing of such applications.

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