Articles of organization vs operating agreement: which document records which figure; also operating agreement vs articles of organization, difference between operating agreement and articles of organization, is operating agreement the same as articles of organization, LLC operating agreement vs articles of organization

Articles of organization and an operating agreement are not the same document, and the difference between them decides where each number about your company lives. The articles are the filing that creates the company: a public form lodged with the state's filing office, with the fee the state sets, which this site does not publish. The operating agreement is the private contract the members write among themselves, never filed, which records who owns what, how profit is split, what a decision needs and how the agreement changes. This page sets the two side by side by what each one records, and points at the free worksheets on this site that work the operating agreement's numbers. Nothing here is the state's rule text or legal advice.

What the articles of organization record, and who they are for

The articles name the company, its state, its registered agent and usually its organizer and management structure, and they exist so the state and the public can find the company. They record almost none of the money: no contributions, no shares, no reserve, no thresholds. What the state requires the articles to contain, what it charges to file them and how they are amended are questions for the filing office and are not answered here; the formation venture's subject is that filing, not this site's.

What the operating agreement records, and why it is the members' own

The operating agreement is where the numbers live: each member's contribution, the ownership share it buys, how profit and loss are split after a reserve, the vote a major decision needs, how a manager is appointed and removed, how a member is admitted and diluted, and how the agreement is amended. It is private, signed by the members, and read by the bank, the accountant and a future buyer rather than by the state. The free worksheets on this site work every one of those figures from the members' own inputs.

Is the operating agreement the same as the articles? Where people confuse them

The confusion comes from both documents naming the management structure and, in some states, the members. But the articles state a fact for the public record and the agreement sets the rule the members will live by, with the numbers attached. When the two disagree, that is a question for counsel; when the agreement disagrees with itself, that is arithmetic, and it is the failure the worksheets exist to prevent by working shares, distributions and votes from one set of figures.

What this site publishes about each document

About the articles: nothing but their existence, because their content and fee are the state's. About the operating agreement: the arithmetic it records, worked free on the page from the members' figures, and, on LLC Lane Pro, the record of every company, member, agreement and amendment kept against the company. The wording of the agreement and the question of what your state requires stay with your attorney.

Questions people ask about articles of organization vs operating agreement

Do I file the operating agreement with the state?

Generally the operating agreement is a private document kept by the members and not filed; the articles are what the state holds. Whether your state has any filing or content requirement for the agreement is a question for its filing office and your attorney.

Which document has the ownership percentages?

The operating agreement. The articles rarely record contributions or shares; the agreement records both, and the worksheet on this site works the shares from the contributions so they agree.

Can I have an operating agreement without articles, or the reverse?

The articles form the company, so an agreement without them governs a company that does not yet exist; articles without an agreement leave the members' shares, distributions and votes to the state's default rules, which this site does not publish. Ask counsel about the defaults; work the numbers here.

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