Having a seasoned professional on your team can be a real asset when you launch a new business as a limited liability company (LLC). An executor provides valuable guidance and support during the early stages of your company's growth, helping you organize the business and ensuring that every required legal document is in place.
This short guide walks you through the role and responsibilities of an LLC executor.
What Is an LLC Executor?
An LLC executor is responsible for the formation of the LLC. They ensure the company abides by local, state, and federal law.
They may also provide the business owner with legal or tax guidance, since a working knowledge of business law and tax legislation is essential to operating an LLC.
Owners who lack the time or expertise to act as their company's executor can engage a professional to handle it on their behalf. Anyone — an attorney, an accountant, or an initial LLC member — can serve as an LLC executor. No additional paperwork or state filing is required for an executor to serve.
What Are the Responsibilities of a Business Executor?
The executor is accountable for a wide range of tasks, including:
- Filing the Articles of Organization with the state
- Appointing an agent for service of process
- Drafting, preparing, and filing an annual report
- Keeping company records up to date
- Obtaining tax identification numbers
- Preparing and filing tax returns
- Addressing any legal issues on the LLC's behalf
- Protecting the company's assets and bank account
The executor can also provide direction while your company is being formed, helping you organize and confirming that all necessary documentation is in place.
The Articles of Organization process:
- The LLC executor is the professional who forms the LLC in accordance with state law and establishes its status as a legal entity.
- The Articles of Organization — called a Certificate of Formation in some states — is one of the most important LLC formation documents.
- The executor submits the Articles of Organization to the appropriate state authority, usually the Secretary of State.
- The Articles of Organization list the LLC's essential legal details, including its name, address, and the registered agent's name and address for service of process.
- A statement in the Articles of Organization typically confirms that the executor represents all LLC members.
Who Can Be a Business Executor?
A business executor is the individual or entity responsible for forming an LLC.
Some states require the executor to be at least 18 years old, a resident of the state where the company is being established, and not already barred from doing so by another state.
Although it isn't required, LLC members can serve as their own executors. State law does not require an executor to also be a member.
An LLC executor may be a single person, a group, a family member, a business lawyer, your LLC's registered agent, a corporation, an association, a trust, a partnership, or any other legal institution.
What Paperwork Does an Executor Need to Complete?
- An LLC's executor is responsible for filing documents, notifying authorities of changes, and filing operating agreements, among other duties.
- An executor can usually submit the documentation online. You pay a small fee and provide the company name and contact details to create the LLC.
- An executor can name a registered agent to accept legal paperwork on the company's behalf.
- By law, registered agents must submit an annual report to the relevant government body detailing the business's records.
- An LLC executor is legally obligated to notify state agencies, such as the Secretary of State, of changes to corporate records. The same applies to all limited liability companies registered with the IRS.
- The executor must submit the Articles of Organization to the state, and the Internal Revenue Service (IRS) must be informed of the new venture.
- Unlike sole proprietorships and other commercial entities, an LLC needs an operating agreement. This document describes the LLC's administration, financial processes, and corporate structure.
Key Takeaways
- An executor is the person in charge of forming an LLC.
- The executor must ensure the LLC complies with all local, state, and federal laws.
- The business owner may receive tax or legal advice from the executor.
- The executor can be a single person, a group, an association, a trust, a partnership, or another legal entity.
- An LLC executor has several responsibilities, including submitting paperwork, updating authorities on changes, and filing operating agreements.