Section 202. Organization

(a) One or more persons may organize a limited liability company, consisting of one or more members, by delivering articles of organization to the office of the [Secretary of State] for filing.

(b) Unless a delayed effective date is specified, the existence of a limited liability company begins when the articles of organization are filed.

(c) The filing of the articles of organization by the [Secretary of State] is conclusive proof that the organizers satisfied all conditions precedent to the creation of a limited liability company.

Comment

Any person may organize a limited liability company by performing the ministerial act of signing and filing the articles of organization. The person need not be a member. As a matter of flexibility, a company may be organized and operated with only one member to enable sole proprietors to obtain the benefit of a liability shield. New and important Internal Revenue Service announcements clarify that a one-member limited liability company will not be taxed like a corporation. Nor will it be taxed like a partnership since it lacks at least two members. Rather, a one-member limited liability company is disregarded for Federal tax purposes and its operations are reported on the return of its single owner.

The existence of a company begins when the articles are filed. Therefore, the filing of the articles of organization is conclusive as to the existence of the limited liability shield for persons who enter into transactions on behalf of the company. Until the articles are filed, a firm is not organized under this Act and is not a "limited liability company" as defined in Section 101(9). In that case, the parties' relationships are not governed by this Act unless they have expressed a contractual intent to be bound by the provisions of the Act. Third parties would also not be governed by the provisions of this Act unless they have expressed a contractual intent to extend a limited liability shield to the members of the would-be limited liability company.