Many individuals who are new to entrepreneurship sometimes confuse the articles of organization and articles of incorporation when setting up their business in California as an LLC. For one thing, there are many steps in forming an LLC in California and a lot of aspiring entrepreneurs prefer to process it solo. The things, it’s complicated even if you are a veteran. Should you learn and go through the procedures on your own or seek professional assistance for accuracy and save time? Are you aware of the risks that come with this undertaking?
The process can be daunting for a novice and you will need to have ample allowance in completing the articles of incorporation or organization. To form an LLC or Limited Liability Company, the articles of organization are among the very first of many official documents you’ll need to get started. You can create such a document on your own or you can have a copy of it from the Secretary of State. Either way, you’ll need to fill it with the minimum and specific information required by the law of the state you’re in.
While taking on this painstaking job will save you money, it consumes a great deal of time. Smart traders choose to leave it to highly qualified professionals that work more precisely and won’t miss a single step or dot in setting up your corporation correctly.
What are the articles of organization for an LLC?
The Articles of Organization, as opposed to the Articles of Incorporation (for corporations), is the most basic and essential document you need when forming an LLC. This is the document you file with the Secretary of State when you want to set up an LLC. In California, the form for the articles of organization is called LLC-1, which you can download from the Secretary of State website.
What does the article of organization contain?
The articles of organization contain basic information about your California LLC. As a minimum, California law requires the LLC articles of organization to contain the following:
- A statement that the purpose of the limited liability company is to engage in any lawful activity for which a limited liability company may be organized.
- The name of the limited liability company
- The street address of the initial designated office and the mailing address of the limited liability company. You have to put both addresses in if your office address is different from your mailing address.
- The name and street address of the initial agent for service of process of the limited liability company.
- If the limited liability company is to be manager-managed, the articles of the organization shall contain a statement to that effect.
- If the limited liability company is to be managed by only one manager, the articles of the organization shall contain a statement to that effect.
When you file your articles of organization, a fee of $70 will be collected. Remember that this may not be the only expense involved.
How and Where Can You File the Articles of Organization in California?
You can have the articles of organization mailed to Secretary of State, Business Entities Filings, P.O. Box 944260, Sacramento, CA 94244-2600 or delivered in person to the Sacramento office, 1500 11th Street, Sacramento, CA 95814.
If you have a lawyer, you won’t have to worry about filing it. This is one of the benefits of having a legal professional set up your LLC.
How Long Does It Take to Form an LLC in California?
There’s no fixed or determinate period when your LLC is going to be finished. The processing and approval of your articles of the organization itself may take up to a week or more.
However, guaranteed expedited service is available for documents submitted in person at the California Secretary of State Sacramento office. Documents can also be processed within a guaranteed timeframe for a non-refundable fee.
What you should remember though is that the Secretary of State’s approval of your articles of organization is not all that there is in properly setting up your California LLC.
What are the other things you need to do to set up an LLC?
Filing and waiting for the approval of your articles of organization is not equivalent to setting up your LLC. Below are some of the things you will need to do either simultaneously or after the filing of your articles of organization:
- Get an Employer Identification Number (EIN) for your LLC,
- Have an operating agreement drafted preferably by a lawyer
- File a Statement of Information
Learn About the Articles of Incorporation in California to Establish a Corporation Instead of an LLC
Also known as a corporate charter or certificate of incorporation, the articles of incorporation are one of the required documentation to establish a corporation. Its contents are similar to the articles of organization in several ways but they serve different purposes.
Also, only one registered agent is required for the articles of the organization while the articles of incorporation require three. A legal professional will prove helpful if you want to submit an accurate draft of the article of incorporation in California to establish a corporation instead of an LLC.
The Purpose of the Articles of Incorporation
The articles of incorporation are a crucial document to legalize your business no matter which state you wish to operate in. This will be useful with various transactions that you may be engaged in while setting up your corporation. You could use it for the following:
- Opening a bank account
- Protecting the finances and assets of your business partners
- Business loan applications
You can submit the articles of incorporation to California’s Secretary of State as well, by mail or in person. If you hired a law firm, the attorney in charge will take care of this.
Contents of the Articles of Incorporation
The articles of incorporation are public documentation so their contents exclude the personal information of partners. The basic details included are:
- Name of corporation
- Board of directors
- Authorized amounts of shares
- Name and address of registering agents
- Information on business partners
- Nature of business
Other information may be required and you may want to check with the state authorities or official website to make sure you are doing it right. You can risk losing a huge amount of time on possible revisions or get legal assistance to free yourself from this complicated paperwork.
Is the Processing Time for Articles of Incorporation in California Longer Than LLC’s Article of Organization?
Business documentations often takes a while to complete. In California, the wait time for articles of incorporation varies depending on the backlog. It is hard to compare the processing time for articles of incorporation and articles of organization because of the various information required. The person in charge of the processing is also a factor that affects the timeframe.
If you decided to do it on your own, consider the learning time, possible resubmission, paperwork, and the like. Hiring a lawyer would speed things up for sure as these professionals know the best ways to make the processing quicker.
Articles of Organization and Articles of Incorporation in California for your LLC or Corporation: Process Them Faster with Legal Assistance
Getting things right from the start goes a long way to having your LLC set up quickly and properly. The same goes if you are processing the articles of organization in California. This way, you can avoid the stress of having to go back and forth trying to fix something that you have missed along the way.
Having a legal professional do it for you will rid you of concerns like how and where to file, your business’ name, the things you need to do after filing the articles, and many more. A business attorney will also help you figure out whether LLC or corporation is the right structure for your business.
Contact us today to find out more about how we can help you get started!
