Do Articles of Organization Expire?
The answer is no; your filed articles of organization do not expire. The LLC Itself, though, may end up being dissolved for several reasons, including failure to comply with annual requirements or exceeding the duration of existence. There is also the question of yearly renewals (or bi-yearly, depending on the state in which your LLC was established), annual reports, and so on. We take a look at all the conditions necessary for the expirations of LLCs and articles of organization below.
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A limited liability company, otherwise known as an LLC for short, is a type of business structure that helps to protect the assets of a business owner from lawsuits, creditors, and various other debt-related issues one might encounter. In the event that the business goes into serious debt and creditors come looking for payment, an LLC will help protect the owner from being personally pursued.
Articles of organization are used to help establish that LLC at the state level. They create the rights, powers, duties, and liabilities of each member of the LLC. They also help to establish the relationship between the LLC and the members themselves. If you’re a new or prospective business owner, both an LLC and those articles of organization are concepts you must familiarize yourself with – especially if you’re starting the LLC with other people.
But do articles of organization expire? No. The LLC itself, however, could still become dissolved for a wide range of different reasons. The same is true of any other business entity. Why that happens and what you must consider after filing articles of organization requires you to keep a number of important things in mind.
Does an LLC last forever?
Technically, the LLC you just formed can last “forever.” So long as you’ve gone through the process of filing articles of organization and have followed additional requirements, there’s nothing you have to worry about from that perspective.
Provided that you do not go out of your way to specify a date of expiration when filing articles of organization, most states will assume it is intended to be a “forever document.”
Note that you can also accomplish much the same thing by specifying in your LLC operating agreement that the business entity name of the LLC is intended for “perpetual operation.”
This doesn’t mean that it is a guarantee that your limited liability company or other business entity is impervious to issue, however.
LLC annual requirements: Breaking things down
If you set a date of expiration on your articles of organization, your LLC will become automatically and officially dissolved at that time. Assuming you didn’t do that, you will still need to meet all the annual LLC requirements as dictated by the state you’re operating in.
Note that each set of requirements will obviously vary depending on exactly which state you’re talking about. If you have questions about specific requirements, you should always consult the services of a professional who can offer you sound legal advice.
Having said that, there are a few common themes that most states share in common. They include but might not be limited to elements like the following.
- You need to specify a registered agent, which is essential for tax purposes (among other reasons). This can be any one of the members of the LLC. It can also be an external individual should you choose. If you do not specify a registered agent, your business entity could be considered “inactive” and thus cannot legally operate in the state.
- You need to file an annual report. In addition to the name of your registered agent, this will also include information like your business name/company name, the street address of your LLC, any P.O. box information that may be necessary, business entity ID numbers, and the LLC state reference number.
- You’ll need to make sure that any business license or other permits are registered and up-to-date before the registration process can take place.
- You’ll need to pay all necessary taxes, including both to the IRS and the state.
Note that another one of the reasons why naming a registered agent is important has to do with service of process. In the event that your business gets sued, the registered agent is the person who can legally be served on behalf of everyone named in your LLC operating agreement.
Some of the other annual LLC requirements, whether you’re talking about an established or new business, are more general in nature.
- You’ll have to pay an associated filing fee and meet all state deadlines, for example. If you’re paying by credit card, you may be able to do so via a state online filing system. If you’re paying via money order, you will want to send it (and any other required legal documents) to the mailing address listed for your Department of State.
- You’ll have to pay any necessary annual fees, again via either credit card or money order payment, on behalf of your small business.
- You cannot have filed for bankruptcy during the previous year.
So long as all of the above is true, your business entity will be considered in “good standing.” In essence, you’re in total compliance with all state regulations.
Note that if anything about the LLC changes throughout the year – like a business address, for example – nothing needs to be renewed, but it will need to be updated. This will need to take place before the LLC can be formally renewed the following year.
How do you renew an expired LLC? An overview
Thankfully, renewing an expired LLC is a relatively straightforward process. Again, each state will have its own unique requirements, but most of them are fairly simple. It typically involves:
- Requesting (or downloading) a renewal application form. Note that this is different from the form you originally filled out to register your LLC in the first place.
- Providing any other legal documents as specified.
- Paying the filing fee, either via money order or via an online filing system. If you’re paying online, you’ll need to specify all payment information including credit card numbers, bank account information, and any relevant expiration dates.
Note that you should carefully review everything before you submit it. Don’t just check for accuracy – make sure that it is all keeping in line with the state or gov submission guidelines.
Always keep a record of absolutely everything you submit, when it was submitted, and who it was sent to. That way, if there is some type of discrepancy or other issue later on, you have something to fall back on. This is also why you want to file a certified copy of documents whenever possible.
In the end
LLC articles of organization can feel like a stressful and somewhat overwhelming process – especially if you’re new to the world of owning and operating a small business. But they’re also absolutely essential for a wide range of different reasons.
If you’re starting a business with other people, each of the members of the LLC will have their own unique responsibilities to one another. They have their own rights and protections should disagreements occur. Without articles of organization, this could potentially become a chaotic “free for all.” With it, there are clear processes and procedures in place that should be followed to the letter.
If your business entity gets sued, you could be personally liable for any damages that occur. If an unsatisfied customer is coming after you to try to recoup money from a bad purchase, that’s one thing. If they were injured on your property as a result of your negligence and try to come after your personal assets for hundreds of thousands of dollars, that’s another thing altogether. Proper legal documents like articles of organization can help prevent that from happening.
While it’s true that articles of organization do last forever, they can still “expire” from a certain point of view. Most states will require you to keep up with certain annual requirements, like following a yearly report. Failure to do so could easily lead to a situation that you would rather avoid.
Having said all of that, this is one of the parts of owning and operating a small business that gets far easier as it goes on. Once your articles of organization are filed properly, you can stop worrying so much about legal documents and devote the majority of your attention to the most important goal of all: running the most successful company that you can.
FAQs
How much does it cost to reinstate an LLC?
The amount of money that you’ll pay to reinstate your LLC will vary depending on exactly which state your business entity operates in. In New York, for example, it only costs a $9 fee to get the LLC back in good standing.
If your business entity operates not just in California but in Los Angeles specifically, it will cost $26. A small business operating in Florida will need to pay $100 to have the LLC reinstated. Note that this is in addition to any annual report filing fee that also exists. In Florida, that will be an additional $138.
Do articles of organization need to be notarized?
Yes. As a part of your routine business activities, your articles of organization will need to be properly notarized in most states. To verify whether yours is one of those states, you should again either consult a professional that is capable of giving you state-specific legal advice, or check for requirements with the Secretary of State website online.
How do I make an LLC inactive?
There are many different reasons why someone might want to make an LLC inactive. Sometimes, your business services no longer have a market large enough to sustain themselves. In other times, you may not believe in your business purpose the way you once did.
Bankruptcy and the loss of one of the members of the LLC are also viable reasons.
Regardless, you can easily make your limited liability company inactive by requesting a “Certificate of Cancelation” from your state. You’ll include the address of the LLC, among other information, and will provide a detailed reason why you’re requesting the cancelation.
What happens if you don’t renew an LLC?
If you don’t renew your LLC by the appropriate deadline, you’ll first receive a warning letter at your registered office from the Secretary of State. It will likely be addressed to either your business entity directly or the agent name for your registered agent.
If you don’t take steps to correct the problem, you will face administrative dissolution. This means that your LLC will no longer be recognized as a legal entity by state agencies. Even though you can still technically do business (provided that you have a valid business license), you will lose all protections that the LLC was supposed to bring with it.
What happens when an LLC “expires”?
If your limited liability company expires, the first thing you should make note of is the date of expiration. From that point forward, the LLC has officially ceased to exist.
For the sake of example, say that your LLC officially expired on June 1 and your business entity is sued on June 10. This means that you no longer have the protections that you once did. Not only can the person (and their legal team) come after a bank account associated with your company, they can come after your assets personally as well.
Note that this is an entirely different process than what happens if your LLC was voluntarily dissolved. Here, a series of processes are initiated through the state.
This is just one of the many examples of what can happen if your LLC is allowed to expire because of something like an online filing fee that you never paid. There are many others, the severity of which will vary depending on the situation.
How do I know if my LLC is still active?
To determine whether your LLC is still active, all you need to do is check in with the state. California, for example, has a business entity search tool that is available online from the Secretary of State’s office. Just search for your business name (you can even use additional information like your business address) and you’ll be able to view the status.
You will see either “Active” or “Inactive” depending on your status.
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