This article will explain the LLC statement of business purpose.
Also referred to as: LLC purpose, LLC business activity, LLC business activity purpose, and LLC purpose statement. Different states use different names, but they all mean the same thing.
Forming an LLC is done by filing either an Articles of Organization, Certificate of Organization, or Certificate of Formation (depending on the state where you’re forming your LLC).
(related article: what’s the best state to form an LLC?)
Not all states ask for the LLC to make a statement about its business purpose, but the majority of states do.
Some states allow for a general LLC purpose to be listed, while others ask for a specific LLC purpose instead.
Generally speaking, when a state asks for a specific LLC business purpose, they want to know the primary business activity your LLC will engage in. Said another way, they want a few words about what the LLC will do, or a short phrase or sentence about the LLC’s business purpose.
If the state allows an LLC to have a general purpose, you’ll either check off a box, or enter a phrase that gives the LLC its general purpose.
Tip: Even if a state’s LLC filing has a field for “purpose”, if the state’s laws allow for a general purpose, you can use a general purpose statement, like the examples we have below.
LLC General Purpose Statement
As mentioned above, the state will either have a box to check off or a text field to enter the general purpose business statement for your LLC.
Here are a few examples:
“The purpose for which this Limited Liability Company shall be organized is for any and all lawful purposes for which a Limited Liability Company may be organized as per the laws of the state of New Jersey.”
“The purpose for which this company is formed is for the transaction of any and all lawful purposes for which a limited liability company may be organized under the laws of the state of New Jersey.”
“This LLC shall be organized for any and all lawful purposes for which an LLC may be organized pursuant to the provisions of the New Jersey Limited Liability Company Act.”
“For any and all lawful purposes for which an LLC may be organized in this state.”
1. Replace the state above with any other state name. We’re just using New Jersey as an example.
2. You can pretty much choose any version or variation that you’d like. They all have the same effect.
LLC Specific Purpose Statement
If the state doesn’t allow for a general LLC purpose to be stated and instead they want a specific LLC purpose to be listed, you can either:
- enter a few words
- enter a phrase
- enter a complete sentence
Examples of an LLC’s business purpose in a few words
- pizza shop
- coffee distributor
- yoga studio
- business consulting
- online retail
- shipping & logistics
- computer repair services
Examples of an LLC’s business purpose in a phrase
- the purchase, sale, and investment of real estate
- manufacturing and logistics for medical supply devices
- nationwide freight services for the furniture industry
- frozen yogurt shop with packing and retail operations
Examples of an LLC’s business purpose in a complete sentence
- The LLC business activities will be the research and development of new blockchain technologies, an online publication, and a paid subscription newsletter.
- Online courses for programmers in video, audio, and written format. In addition, a nationwide referral network for recruiting.
- The construction of new homes, raw land acquisition, and the sale and transfer of various real property rights and contracts.
Note: If you want to even be more specific by entering more than one sentence, that is also perfectly okay. However, most filers prefer to keep things short and sweet.
Will I be forced to do this forever?
No, you won’t be forced to do these business activities forever.
Most states ask for your LLC’s purpose for statistical records only.
In fact, LLCs are very flexible. They can be used for 1 purpose or multiple purposes (there are no limits). And that LLC purpose (or purposes) can change and evolve as your business grows.
You can always change the purpose of your LLC later (by filing an amendment), but it’s really not required. You just need to list an LLC business purpose during the initial filing for your LLC.
NAICS Code used for LLC business purpose description
Some states may not allow you to describe things yourself, and instead, they want you to designate the purpose of your LLC by selecting an NAICS Code.
Government agencies use the NAICS Code (“North American Industry Classification System“) as a “standardized” way to describe a business industry and its activities. The classification is designated by numbers and is kept on file with the US Census Bureau.
You can browse the structure of the NAICS code here:
North American Industry Classification System