What is an Executor of an LLC?

When starting a new limited liability company (LLC), one of the first steps is designating an executor. But what exactly does an executor do? Keep reading for a complete overview of LLC executors.

An LLC executor is the person responsible for officially forming the LLC by filing all the necessary paperwork with the state. The executor handles the initial legal and tax set up of the LLC.

While the executor may be one of the founding LLC members, they don’t necessarily have to be. Many people choose to have an attorney, accountant, or incorporation service act as the LLC executor.

Key Responsibilities of an LLC Executor

Here are some of the core duties an executor handles when establishing an LLC:

Filing the Certificate of Formation

The executor is responsible for drafting and submitting the Certificate of Formation (sometimes called Articles of Organization) that registers the LLC with the state. This multi-page document contains important information like the business name, registered agent, principle office address, membership structure, distribution of shares, etc. Proper completion and filing leads to the LLC becoming officially registered.

Providing Legal and Tax Advice

The executor should understand all the legal and tax implications involved in forming an LLC. This includes advising on the optimal LLC structure for limiting liability, proper member/manager roles, appropriate tax elections like choosing to be taxed as an S-corp, and compliance with state and federal regulations. Proper legal and tax setup avoids issues down the road.

Maintaining Records

The executor needs to keep all formation documents and operating agreements in order per state regulations. This includes storing copies of filed certificates, company bylaws, member/manager information, ownership agreements, and any other official records. Proper documentation retention keeps the LLC compliant in case of audits or state reviews.

Dissolving the LLC

If the business were to close, the executor would handle the dissolution process including filing the necessary paperwork and following all state-mandated closing procedures. This involves liquidating assets, settling final taxes and debts, distributing remaining funds to members, cancelling licenses/registrations, and submitting final termination documents.

Complying with State Laws

It’s the executor’s responsibility to ensure the LLC meets all requirements outlined in state statutes. This includes designating a registered agent, keeping the company in good standing by submitting annual reports/fees, fulfilling tax and licensing obligations, and staying current on any regulatory changes impacting LLCs. Ongoing compliance prevents penalties, lawsuits, or even administrative dissolution.

Why Choose an Experienced Executor?

Forming an LLC comes with many legal and operational details that are easy to mess up. Having an experienced business attorney, accountant, or incorporation service act as your executor helps avoid costly mistakes. They can also provide guidance on the best way to structure and register your LLC for your specific situation.

A professional executor stays up-to-date on the latest rules and regulations impacting LLC formation and compliance. They have extensive experience navigating the process and submitting error-free paperwork on the first try. This prevents potentially expensive delays or re-filing fees.

Additionally, a professional service can act as your registered agent to handle all state correspondences and legal notices after filing formation documents. This provides an added layer of protection and compliance.