When forming a Limited Liability Company (LLC), having the right legal documents is crucial for establishing your business properly and ensuring long-term protection.

These documents do more than just check legal boxes—they help define your business structure, protect your assets, and clarify ownership roles within your LLC.

In this article, we’ll cover the five essential legal documents you need to form an LLC.

Having these documents in place will help you navigate legal requirements, establish clear operations, and give your new business a strong foundation.

1. Articles of Organization

The Articles of Organization are a key document in starting your Limited Liability Company (LLC). They help you establish your LLC as a legal entity. This document is public and filed with the state where your business operates.

When you prepare the Articles of Organization, you’ll need to include basic information about your LLC. This usually involves your LLC’s name, address, and member details. Make sure your business name complies with your state’s naming rules.

Filing procedures can differ by state. For example, in D.C., you can file online, by mail, or in person. Each state has its own filing fee and processing time, so be sure to check those details.

Consider a professional registered agent service to stay compliant with your LLC’s filing requirements.

Your Articles of Organization may also need to state whether your LLC will use a DBA (Doing Business As) name. This is only if you plan to operate under a name different from your LLC’s legal name.

You’ll file your articles with the state agency responsible for filing business. This could be the Secretary of State or a similar office. Once approved, your LLC becomes legally recognized.

Keep a copy of this document for your records. It helps prove your LLC’s legal status and can be useful when opening a bank account or signing contracts.

2. Operating Agreement

An Operating Agreement is a key document for your LLC. It sets the internal rules for your business. Even if your state doesn’t require one, having this agreement can help prevent misunderstandings among members.

This document outlines how financial and functional decisions will be made. It covers important aspects like member roles, voting rights, profit-sharing, and what happens if a member leaves the LLC.

Why You Need It

• Structure: Helps organize and define how the company is run.
• Protection: Shields your personal assets by separating them from the business.
• Flexibility: Allows customization of the LLC settings based on your needs.

Essential Elements

• Member Details: Names of all members.
• Management: Whether it’s managed by members or appointed managers.
• Capital Contributions: What each member invests.
• Profit and Loss: How these are shared among members.

State Requirements

An Operating Agreement template is legally required in some states like California, Delaware, Maine, Missouri, and New York. Even if your state doesn’t need one, it’s a good idea to have it in place to clearly define how your business will operate.

Creating a solid Operating Agreement ensures everyone knows their responsibilities and rights. This peace of mind lets you focus on growing your business together.

3. EIN (Employer Identification Number)

An Employer Identification Number (EIN) is essential for your LLC. It acts like a Social Security number but for your business. With this nine-digit number, the IRS can identify your business for tax purposes.

To apply for an EIN, you’ll need to fill out Form SS-4. You can do this online through the IRS website. The process is free and only takes a few minutes.

Your EIN is necessary for several reasons:

• Opening a Business Bank Account: Many banks require an EIN to set up an account for your business.
• Filing Taxes: You’ll use your EIN when filing federal and, sometimes, state taxes.
• Hiring Employees: If you plan to hire workers, you’ll need an EIN to report employment taxes.

You can apply for an EIN if your main business is located in the U.S. or its territories. Make sure the person applying has a valid SSN, ITIN, or another EIN. You’re allowed one EIN per responsible party each day.

Having an EIN is a key step in forming your LLC. It’s one of those small but important details that help get your business off the ground smoothly.

4. Business Licenses and Permits

When forming an LLC, obtaining business licenses and permits is crucial. Each business must comply with local, state, and federal regulations, which might vary based on your specific industry and location.

Depending on your business activities, you may need a general business license. This license allows you to operate legally within a specific city or county.

If you sell goods, you might also need a sales tax permit. This allows you to collect customer sales tax and report it to the state.

Consider industry-specific licenses, too. For example, if you’re in the food industry, ensure you have a health department permit for food safety.

Licensing isn’t just about the state or federal government. Local government has requirements as well. Check if you need a home occupation permit if you’re operating from home.

Remember to renew licenses and permits as required, as some need yearly updates. Not doing so can lead to fines or even the closure of your business.

5. LLC Membership Certificates

Creating Membership Certificates is an important step in forming an LLC. These certificates show each member’s ownership in the company. They act like a receipt or proof of ownership for those who have invested in your LLC.

Each certificate should include the member’s name, the number of membership units they own, and the date it was issued. Some companies also add signatures from company officials to add an extra layer of authenticity.

You don’t need to get these certificates notarized, as long as the person signing them is authorized to admit members to the LLC. Keeping them updated ensures that ownership stakes are clear.

It’s helpful to think of LLC membership units like shares in a corporation. They represent a member’s stake in the company and often give rights to vote on big decisions and to share in the profits.

Having clear and well-documented certificates can help prevent any misunderstanding about who owns what. This can be very useful in managing finances and during any legal situations.

Remember to store these certificates safely. You might want to keep both physical and digital copies. Good record-keeping can make your business run smoother in the long run.