What Is an Incorporator or Organizer of a Business?
When a business (a corporation or LLC) is formally registered with a state, certain information is required. This information changes from state to state, but many states have in their registration process a requirement to disclose the name of the person who is in charge of formally setting up the organization.
For a corporation, this person is called the incorporator. For an LLC, this person is called the organizer. This article discusses the position of the incorporator or organizer. The two positions are similar, but we'll take one at a time, starting with the incorporator of a corporation.
What Is an Incorporator?
An incorporator is a person in charge of setting up a corporation. The incorporator signs and files the Articles of Incorporation with the state in which the corporation is registering, and files any other corporate documents needed until the corporation is formally registered and recognized by the state.
Other duties of the incorporator might include:
- Selecting members for the board of directors
- Organizing an initial meeting of the board
- Adopting the corporation's by-laws
Sometimes the incorporator resigns after completing the required signatures and affirmations.
Who Can Serve as an Incorporator?
An incorporator can be but does not necessarily have to be, an attorney. The person designated as the incorporator is listed on the Articles of Incorporation so he or she may be contacted by the state, if necessary.
The incorporator may be a shareholder, a director, a member of a board of directors, or an officer (president, treasurer, secretary). Because this person is signing legal documents on behalf of the corporation, he or she should have the authority to act on behalf of the corporation.
The incorporator has no formal duties once the corporation has been registered with the state. Some states require that an incorporator be 18 years old. Usually, an incorporator will resign this position after the documents have been filed.
Why Is an Incorporator Important?
The reason some states require an organizer is for two reasons:
- To have someone with authority to sign documents make sure that everything is correct
- To assure that the corporation can do business in the state
What Is an Organizer?
An organizer is a person who performs the same functions as an incorporator, only for a Limited Liability Company (LLC). In this case, the organizer would:
- Sign and file the Articles of Organization (similar to Articles of Incorporation) or the Certificate of Organization.
- An LLC doesn't have by-laws, but it does usually have an Operating Agreement, that the organizer may sign. The document to be signed depends on the requirements of the state.
While all states require an organizer (someone to sign documents), not all U.S. states require the signature of an organizer. on the Articles of Organization. Some states that require an organizer to sign LLC formation documents include:
- Hawaii has an organizer designation for LLC formation.
- Pennsylvania allows for multiple organizers.
- California also allows multiple organizers.