A limited liability company (LLC) is one of the easiest formal business entities to form, but that doesn’t mean there aren’t any confusing elements.
There are thousands of LLCs formed each day, but we’ve found that our readers tend to have a few common questions before they get started with the formation process, one of which is regarding the role of LLC organizers.
No matter where you form your LLC, how many members you have, or what type of industry you’re in, you need an LLC organizer. As it turns out, there are several options for designating an organizer, from handling it yourself to hiring an experienced professional service.
In this guide, we’ll discuss the details of what an LLC organizer is, and how they can help you form your business. Let’s figure out what the best option is for your new LLC.
Save Time. Save Money.
Forming an LLC has a lot of steps involved, some of which can be complicated. That’s why many entrepreneurs hire a service like ZenBusiness and LegalZoom to take care of the LLC formation process.
However, hiring us at ZenBusiness will get you more value and will save $79+ on your LLC formation.
What Is an LLC Organizer?
The LLC’s organizer is the person or business responsible for setting up the LLC.
Organizers fill out the paperwork to form the LLC, sign it, and pay any necessary fees. Once the LLC is formed, the organizer essentially relinquishes control of the entity to the LLC’s members, which is similar to how a corporation’s initial incorporator relinquishes control to the initial board of directors.
In many cases, the organizer is also a member of the company. This is especially true in situations where you have a single-member LLC — for one-person businesses, it’s often easier and cheaper for the owner to simply handle this responsibility themselves. It’s not unusual at all to see members of a multi-member LLC serve as the organizer either, but it’s a bit more common for single-member businesses.
If the organizer is not a member, then the members can entrust the organizer with additional tasks. For example, some LLCs entrust their organizer with the tricky task of drafting the operating agreement. To be clear though, beyond the initial formation of the business, there are no formal responsibilities or requirements for LLC organizers to fulfill.
Who Can Be an LLC Organizer?
In most states, there are no requirements at all regarding who can be an LLC organizer.
The most common requirement is that five states — Colorado, Illinois, Minnesota, Oregon, and Texas — require that the organizer is a legal adult at least 18 years of age. You should check your state’s guidelines prior to appointing your organizer to familiarize yourself with the exact requirements, but in most states the regulations are quite loose.
Other than that, an organizer can be practically anyone, although some options are certainly better choices for your business than others. While some people choose to enlist a friend or family member for this role, or one of the members of the LLC, we prefer hiring a professional who knows what they’re doing. This can be a registered agent, an attorney, or an online LLC formation service.
For us, the experience and expertise of a professional LLC organizer (ex: ZenBusiness) is well worth the money it costs.
What’s the Difference Between an Organizer and a Member?
The distinction between an organizer and a member is important. An organizer can be (and often is) a member of the LLC, but the organizer does not have to be a member.
The members are the actual owners of the business, and they receive a cut of the profits. As for the LLC organizer, their primary responsibility is to file the initial paperwork for the LLC. If the organizer is not also a member, they will not have any additional responsibilities, and they also would not get a cut of the profits.
Hiring a Professional LLC Formation Service
If you don’t have anyone in your LLC’s membership group who has experience as an organizer, we typically recommend hiring an online business services provider to handle this role on your behalf.
Their price points are significantly more affordable than an attorney’s fees, and they still provide trustworthy service.
The issue with these companies is that there are so many of them that it can be hard to decide which one you want to use. That’s why we created our comprehensive guide to the top LLC formation services.
The importance of the limited liability company organizer can’t be overstated. They are tasked with ensuring that your LLC is formed correctly, and that your business is set up for success from day one. Any mistakes made by your organizer could put your business in serious jeopardy.
While plenty of people do serve as their LLC’s own organizer, we strongly prefer to hire someone who has experience in this role. You could hire a business attorney to handle the organization of your company, but this is usually an expensive option. All told, we like to hire online business formation services, as they strike the perfect balance between being reliable and experienced, without costing an arm and a leg.