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Simple English definitions for legal terms
certificate of organization
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A quick definition of certificate of organization:
A certificate of organization is a document that needs to be filed to establish a Limited Liability Company (LLC). It includes important information like the name of the entity, its purpose, and location. Once filed, the LLC is considered "organized" and can conduct business. In some states, like South Dakota and Massachusetts, obtaining a certificate of organization is required before the LLC can engage in transactions or incur debt.
A more thorough explanation:
A certificate of organization, also known as articles of organization, is a legal document that must be filed to establish a Limited Liability Company (LLC).
The certificate of organization includes important information such as the name of the LLC, its main purpose, location of its main office, and the names and addresses of its agents.
Once the certificate of organization is filed with the appropriate authority, the LLC is considered "organized" and can conduct business.
For example, in South Dakota, an LLC cannot engage in any transactions or incur any debts without first obtaining a certificate of organization from the Secretary of State. However, there are exceptions such as obtaining subscriptions or payments of contributions.
Similarly, in Massachusetts, the state secretary must sign the certificate of organization, which serves as conclusive evidence of the existence of the LLC.
In summary, a certificate of organization is a crucial document that establishes the legal existence of an LLC and allows it to conduct business.