By Jake Lawson, LLC Formation Strategist
The difference between an LLC organizer and an LLC member is one of the most misunderstood concepts in business formation. After helping over 1,200 entrepreneurs navigate this confusion, I can tell you that 90% of people overthink what should be a simple distinction.
Here’s the bottom line: The organizer files the paperwork. The members own the business. They can be the same person, but they don’t have to be.
Let me break this down in plain English and clear up the confusion that trips up so many entrepreneurs.
What Is an LLC Organizer? (The Simple Answer)
An LLC organizer is the person who files the formation paperwork with the state. That’s it. They’re organizing the LLC formation process, hence the name “organizer.”
Think of the organizer as the delivery person who drops off a package. They handle the logistics, but they don’t own what’s inside the package.
Who Can Be an LLC Organizer:
- You (the future business owner)
- An attorney you hire
- A formation service company (like Zenbusiness or Northwest)
- A friend or family member helping you with paperwork
- Anyone 18+ years old (in most states)
What the Organizer Actually Does:
- Completes the formation documents (Articles of Organization)
- Signs the paperwork as the person filing
- Submits documents to the state with required fees
- Receives confirmation when the LLC is approved
- Steps aside once the formation is complete
Real-world example: I regularly serve as organizer for my clients’ LLCs. I file their paperwork and get their LLCs approved, but I don’t own any part of their businesses. I’m just the person who handled the filing process.
What Is an LLC Member? (The Ownership Answer)
An LLC member is an owner of the LLC. Members have ownership interests, receive profits, make business decisions, and bear the risks and rewards of the business.
Think of members as the shareholders of a corporation, but in LLC form.
Who Can Be an LLC Member:
- Individuals (people)
- Other LLCs (business entities)
- Corporations
- Trusts
- Foreign entities (in most states)
What LLC Members Actually Do:
- Own percentage interests in the LLC
- Make business decisions (in member-managed LLCs)
- Receive profit distributions
- Bear business losses
- Sign the operating agreement
- Vote on major business decisions
The Key Distinction That Confuses Everyone
Organizer ≠ Owner
This is where 90% of the confusion comes from. People assume that being listed as the organizer on formation documents makes them an owner. It doesn’t.
Common Misconceptions:
Misconception: “I signed the Articles of Organization as organizer, so I own the LLC.”
Reality: Organizer status doesn’t create ownership. Membership does.
Misconception: “My attorney filed my LLC, so they own part of it.”
Reality: Your attorney was just the organizer. You’re the member/owner.
Misconception: “I can’t be both organizer and member.”
Reality: You absolutely can be both. Most solo entrepreneurs are.
Real-World Example of the Confusion:
Sarah hires ZenBusiness to form her LLC. ZenBusiness serves as the organizer and files the paperwork. When Sarah gets her approved documents back, she panics because she sees “ZenBusiness” listed as the organizer instead of her name.
Sarah’s worry: “Do they own my business?”
Reality: ZenBusiness was just the organizer (the filer). Sarah is the member (the owner) as documented in her operating agreement.
Why States Don’t Care About Members (Usually)
Here’s something that surprises most entrepreneurs: Most states don’t require you to list LLC members on your formation documents.
What States Care About:
- LLC name (to prevent duplicates)
- Registered agent (to receive legal documents)
- Organizer (to handle the filing process)
- Basic business information
What States Don’t Usually Care About:
- Who owns the LLC (that’s private business)
- Ownership percentages (internal matter)
- Management structure details (covered in operating agreement)
Jake’s insight: States want to create your legal entity and collect their filing fee. The internal ownership details are between you and your business partners.
States That DO Require Member Information
A few states buck the trend and require member information on formation documents:
States Requiring Member Names:
- Arizona (on Articles of Organization)
- Nebraska (member information required)
- New York (members listed in Articles)
- A few others (check your specific state)
What This Means:
If your state requires member information on formation documents, then being listed as a member does create ownership. But in most states, ownership is determined by your operating agreement, not formation documents.
The Operating Agreement: Where Ownership Actually Happens
In most states, the operating agreement is where you establish who owns what.
What the Operating Agreement Covers:
- Member names and ownership percentages
- Capital contributions (money or assets each member contributes)
- Profit and loss allocation
- Management structure (member-managed vs. manager-managed)
- Voting rights
- Buy-sell provisions (what happens if someone wants out)
Why This Matters:
The operating agreement is the real ownership document. It’s not filed with the state, but it’s legally binding between the members.
Example: John serves as organizer for an LLC but isn’t named in the operating agreement. Result: He’s not an owner, even though he filed the paperwork.
Example: Mary hires an attorney to serve as organizer, but Mary is the only member listed in the operating agreement. Result: Mary owns 100% of the LLC.
Common Scenarios and How They Work
Scenario 1: Solo Entrepreneur
- Sarah forms her own LLC
- Organizer: Sarah
- Members: Sarah (100% owner)
- Result: Sarah is both organizer and sole member
Scenario 2: Using a Formation Service
- Mike hires ZenBusiness to form his LLC
- Organizer: ZenBusiness
- Members: Mike (100% owner)
- Result: ZenBusiness handled filing, Mike owns the business
Scenario 3: Attorney-Formed LLC
- Lisa’s attorney forms her LLC
- Organizer: Attorney
- Members: Lisa (100% owner)
- Result: Attorney was the filer, Lisa is the owner
Scenario 4: Multi-Member LLC
- Tom and Jerry start a business together
- Organizer: Tom (handles the paperwork)
- Members: Tom (50% owner) and Jerry (50% owner)
- Result: Tom filed the documents, but both own the business equally
Scenario 5: Complex Structure
- ABC Company wants to own a subsidiary LLC
- Organizer: ABC Company’s attorney
- Members: ABC Company (100% owner)
- Result: Attorney handled filing, ABC Company owns the subsidiary
Banking and the Organizer/Member Distinction
This distinction becomes practically important when opening business bank accounts.
What Banks Want to See:
- Formation documents (showing the LLC exists)
- EIN confirmation (tax ID number)
- Operating agreement (showing who owns what)
- Valid ID from account signers
Common Banking Problems:
Problem: Formation documents show attorney as organizer, but you’re the member/owner.
Solution: Bring your operating agreement showing you as the member.
Problem: Formation service was the organizer, and you don’t have clear ownership documentation.
Solution: Get a “Statement of Organizer” from the formation service confirming your ownership.
Statement of Organizer: The Missing Link
A Statement of Organizer is a document that connects the organizer to the members.
What It Says:
- “I, [Organizer Name], organized this LLC”
- “I now appoint [Member Names] as the LLC members”
- “My role as organizer is complete”
When You Need It:
- Someone else served as organizer (attorney, formation service)
- Banks want clear ownership documentation
- You want a complete paper trail
- Future disputes about ownership could arise
Getting a Statement of Organizer:
- If you were the organizer: You can create one yourself
- If attorney was organizer: Request one from them
- If formation service was organizer: They should provide one automatically
Tax Implications of Organizer vs Member
The IRS doesn’t care about organizers—they only care about members (owners).
For Tax Purposes:
- Organizers have no tax implications (unless they’re also members)
- Members report business income/losses on their tax returns
- Single-member LLCs are taxed as sole proprietorships (by default)
- Multi-member LLCs are taxed as partnerships (by default)
EIN Application Confusion:
When applying for an EIN, the IRS asks about LLC members, not organizers. If someone else was your organizer, you’re still the one applying for the EIN as the responsible party/member.
How to Fix Organizer/Member Confusion
If You’re Confused About Your Own LLC:
Step 1: Review your formation documents
- Who is listed as the organizer?
- Are members listed anywhere on state documents?
Step 2: Check your operating agreement
- Who is listed as members?
- What are the ownership percentages?
Step 3: Get missing documentation
- Request Statement of Organizer if someone else filed
- Create operating agreement if you don’t have one
If You Need to Change Things:
To change organizer: Usually not possible or necessary (it’s historical)
To change members: Amend operating agreement, potentially file state amendment
To add members: Operating agreement amendment, possibly state filing
To remove members: Buy-sell agreement, operating agreement amendment
When Organizer vs Member Actually Matters
Situations Where It Matters:
- Opening bank accounts (banks need to know who owns what)
- Signing contracts (members have authority, organizers don’t)
- Tax filings (based on membership, not organizer status)
- Legal disputes (ownership determines liability and authority)
Situations Where It Doesn’t Matter:
- Day-to-day operations (if you’re both organizer and member)
- Customer relationships (customers don’t care who filed paperwork)
- Vendor relationships (they care about who can sign contracts—members)
My Recommendations for New LLCs
If You’re Forming Your Own LLC:
- Serve as your own organizer (simpler documentation)
- Create an operating agreement immediately after formation
- Keep clear records of your role as both organizer and member
If Someone Else Forms Your LLC:
- Get a Statement of Organizer from whoever files
- Create an operating agreement showing your ownership
- Keep both documents for banking and future reference
If You’re Using a Formation Service:
- Ask about Statement of Organizer upfront
- Confirm they’ll provide ownership documentation
- Don’t assume their organizer role creates any ownership
Frequently Asked Questions
Can the organizer be removed or changed later?
Usually no. The organizer is a historical role—the person who filed the original paperwork. Some states allow amendments, but it’s rarely necessary since the organizer’s job ends once the LLC is formed.
Does the organizer have any ongoing authority in the LLC?
No, unless they’re also a member. Once the LLC is formed, the organizer’s role is complete. Only members (and managers in manager-managed LLCs) have ongoing authority.
Can there be multiple organizers?
Some states allow multiple organizers, but it’s unnecessary. One organizer can handle the filing for any number of future members.
What if the organizer dies before the LLC is formed?
This could complicate the process. The formation might need to be refiled by someone else. This is one reason to use formation services—they provide continuity.
Can an LLC be its own organizer?
No, because the LLC doesn’t exist yet when the formation documents are filed. The organizer must be an existing person or entity.
Do organizers need to be U.S. citizens or residents?
Requirements vary by state. Most states allow non-residents to serve as organizers, but a few have restrictions. Check your specific state’s requirements.
Jake’s Final Recommendations
After helping 1,200+ entrepreneurs understand this distinction, here’s my practical advice:
If you’re forming your own LLC: Serve as your own organizer. It’s simpler and creates cleaner documentation.
If you’re hiring help: Make sure you get proper ownership documentation (Statement of Organizer and operating agreement) regardless of who serves as organizer.
Don’t overthink it: The organizer vs. member distinction matters for legal and banking purposes, but it doesn’t affect how you actually run your business day-to-day.
Focus on ownership: Spend more time planning your operating agreement (which determines ownership) than worrying about who signs the formation documents.
Keep good records: Whether you’re organizer, member, or both, maintain clear documentation of your roles and ownership.
The key takeaway: Being the organizer doesn’t make you an owner, and being an owner doesn’t require you to be the organizer. They’re separate roles that happen to overlap for most solo entrepreneurs.
Focus on getting your LLC formed correctly and then concentrate on building a successful business. The organizer vs. member distinction is just paperwork—what matters is creating value for your customers.
Jake Lawson has guided over 1,200 entrepreneurs through LLC formation, including helping them understand the often-confusing roles of organizers and members. His explanations are based on real-world experience and the questions he’s answered thousands of times. For more LLC formation guidance, visit llciyo.com.
Ready to form your LLC? Whether you serve as your own organizer or hire professional help, make sure you understand your role as the business owner (member) and get proper documentation of your ownership from the start.