The business purpose of an LLC should outline the nature and goals of your business activities, stating what your company may do. It can help to include this in your LLC operating agreement, outlining why your company exists and what its goals are.
State Requirements
Some states allow a general LLC purpose, while others ask for a specific one instead. When a state asks for a specific LLC business purpose, they want the primary business activity your LLC will engage in. If the state allows a general purpose, you’ll check off a box, or enter a phrase giving the LLC its general purpose.
Writing a Business Purpose
Your business purpose is why you formed your company, boiled down to one or two sentences. It can be industry-specific or general to include future business activities. Your purpose can be as simple as doing legal business or a full description of your planned activities.
Examples of Business Purpose
Here are some general business purpose examples: “The purpose for which this LLC is formed is for lawful purposes and business activities permitted by limited liability companies according to the laws in the state of ____.” If your state requires a specific purpose, simply state your primary activities in a sentence or two.
Importance of Business Purpose
The primary purpose of a business is to maximize profits for owners while maintaining corporate social responsibility. Look up your state’s specific laws on business purpose statements when filing an LLC. A purpose statement announces the purpose, scope, and direction of the paper.
Purpose Clause for an LLC
The purpose of an LLC is to protect owners from accountability for firm obligations. An LLC provides liability protection for members. If the business owes money or gets sued, members’ assets are protected.
Defining a Business Purpose
A business purpose is the reason a company exists. It guides decision-making and keeps a company focused. Elements of a strong purpose statement include: clarity, brevity, and encapsulating a business’ essence. LEGO’s statement "To inspire and nurture the builders of tomorrow" balances aspiration and precision.