A common business structure that gives its owners the advantages of both a corporation and a partnership is an LLC, or limited liability company. Articles of Organization must be filed with the state in order to create an LLC, and an incorporator must be chosen to handle the initial paperwork. However, what precisely is an incorporator and what function do they serve in the establishment of an LLC?
A person or organization chosen to handle the initial filing and formation of an LLC is known as an incorporator. They are in charge of drafting and submitting the Articles of Organization to the state, which serve as the formal declaration that the LLC is a distinct legal person from its owners. The LLC’s founding members or managers, who will be in charge of managing the company’s daily activities, must also be chosen by the incorporator.
Many LLC owners decide to name themselves as the single incorporator when it comes to choosing an incorporator. This gives them total control over the formation process and guarantees that they are aware of all legal obligations and needs. However, it is also feasible to name a different person or organization as the incorporator, such as a lawyer or a service that assists with business creation.
Foreign nationals may form an LLC in the Philippines as long as they abide by the Foreign Investments Act and the Philippine Corporation Code. To ensure compliance with all relevant rules and regulations, it is advised to engage a lawyer or a business expert.
Additionally, it is important to remember that a corporation can incorporate another corporation. When a parent corporation creates a subsidiary LLC to carry out a certain commercial activity or to hold assets, this is referred to as a parent-subsidiary relationship. In this scenario, the parent corporation would designate an incorporator to manage the subsidiary LLC’s incorporation.
And finally, after an LLC has been created, its incorporators may be changed. If the original incorporator is no longer active in the company or if there are conflicts of interest, this can be necessary. To ensure compliance with all legal requirements, the process of changing incorporators may be complicated and necessitate legal counsel.
In conclusion, an incorporator is a person who drafts, files, and names the first members or management of an LLC. This person is known as the incorporator. Owners of an LLC may act as the sole incorporators or may appoint another person or body to carry out the process. In the Philippines, both foreign nationals and corporations are permitted to incorporate other corporations. Finally, incorporators may be changed, but doing so may be difficult and necessitate legal counsel.