You’ve taken the first step and have successfully formed your LLC, but how do you confirm that you are the owner? We’ll answer that in this blog post!
Tl;DR (Too Long; Didn’t Read)
Looking for a quick summary? Here it is!
Your articles of organization does not show LLC ownership (especially in states like Wyoming or Delaware that can protect the personal information of the LLC owners!) This will show your LLC, the date it was formed, and serves as proof that your LLC exists.
Your operating agreement does show LLC ownership. This doc is an internal document and only becomes official once signed by the team! It can be edited, and signed and there is no need to resubmit any information to the state if this is done. If your operating agreement is blank, or has a typo, all you have to do is edit the document, sign it, and you’re all set! As for why the operating agreement would have a typo: an operating agreement is a template! It is a flexible, living breathing document and this is one of the major benefits of forming an LLC (the ease of updating / making changes to it). The agreement can sometimes be blank OR a registered agent partner at the state can sometimes incorrectly write a name on the document. But again, if this happens, rest assured, this does not mean that you are not the owner of your LLC! All you have to do again (note: we at the company happy to do this as well) is update the names in the doc, then you have to sign it and you’re good to go!
Your EIN confirmation letter does show LLC ownership. This is a document sent directly from the IRS (Internal Revenue Service). It will show your EIN, LLC name and the member of the LLC who is the authorized responsible member!
Articles of Organization
When your LLC is formed the state will send you a document called a Limited Liability Company Articles of Organization.
Below is an example of an Articles of Organization from a company created in Wyoming. As you can see, the personal information of the LLC owner is not on this document.
Why? Wyoming is one of the states that provides great privacy protection so it allows one to put the name of the registered agent on the public record (the articles of organization) to protect the personal information of the LLC owners. Delaware is another state which offers this!
Note: When working with us, in our signup flow, you can decide whether or not you want to have this privacy protection, which is the most common option our customers select!
Initial Resolutions + Operating Agreement
You will also receive a document called your Initial Resolutions.
This document is documentation that the organizer (read: filer) of your LLC has formed your LLC and it also includes:
The names of the members of the LLC (which you can edit if need be! we’ll come back to this point in the next section)
The name of your LLC, the date it was formed, the state it was formed in, and the filing number
The Initial Resolutions document is often in the same PDF document as your Operating Agreement.
The operating agreement is a document that outlines the bylaws of the company and is the “internal structure” for how the LLC operates! Below are some pictures of what this looks like:
These are the documents that you can use to designate and show who the member or members of the LLC are!
Here’s the important thing to note though: These documents are internal documents!
In other words this means:
You are able to make any modifications/changes (including updating ownership %s) and sign it whenever you and/or your team is ready.
It can then be saved in a digital folder, in your home, or wherever you prefer.
If you make changes to this operating agreement it does not need to be sent to the state, it’s for your personal records.
Not only can you update ownership %s but if you need to add names to the agreement or make changes there, you can do so at any time.
Again this document does not need to be re-submitted to the state.
This is one of the major benefits of an LLC: the flexibility it provides and ease it provides in making updates / amendments!
To make changes to this document, the state has explicitly told us: “Simply download the document and use a PDF editor to make changes to fit your needs. It [the operating agreement] is not legally binding until signed. Since this is an internal document, it does not need to be submitted back to us or to the state for any reason.”
What do I do if there is a typo or incorrect name on my operating agreement OR the name is blank? Is the LLC mine?
This can happen in several ways:
The state or a registered agent partner can mistype the name of the member on the operating agreement. We have seen this happen before!
The state or registered agent partner can also sometimes leave this document blank. We have seen this happen before as well!
In either case, there is nothing to worry about and there is an easy fix.
Here are the steps:
Simply download the document and use a PDF editor to make changes to fit your needs.
It [the operating agreement] is not legally binding until signed. Since this is an internal document, it does not need to be submitted back to doola or to the state for any reason.
You’re all set!
Note: We are also more than happy to make this edit for you if the document is blank or has a typo (either the incorrect name OR a misspelling of the name!)
EIN Confirmation Letter
Lastly another document which shows LLC ownership is your EIN confirmation letter! This is a letter sent by the IRS once your EIN has been assigned. We’ve blurred out the information below but you can see the “Sole MBR” = “Sole Member” field below and the EIN number!
There are various documents you receive when you form an LLC. Your operating agreement is the document which will reflect ownership of your LLC (and your EIN confirmation letter can do this as well!)
If you have any questions about forming an LLC, or designating LLC ownership don’t hesitate to live chat us online.
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