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How to write an LLC business purpose statement

Are you starting a business but don’t know what your purpose is? Learn how to successfully write an LLC statement of business purpose that shows your value.

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Businesses come in all shapes and sizes. However, regardless of whether you’re in air travel, social media, real estate, health care, or any other sector, if there is one thing they have in common, it’s that they all have a purpose. With that being said, sometimes it can be not easy to express your company's purpose in the correct words. Nonetheless, it's essential that businesses craft a purpose statement that reflects who they are and what they do, so potential customers and clients get a general idea about what your business goals are. 

So, whether you’re starting a new small business or looking to generate a new business purpose statement for your current company, you've come across the right article. We're going to teach you how to create an LLC purpose statement for your business and non-profit organization while providing you with real statement examples to help guide your process in the right direction. Therefore, for more information on how to write an LLC statement of business purpose, keep reading. 

What is a business purpose for an LLC?

Simply put, a business purpose is a reason why your company has formed in one or two sentences. It’s why you choose to make a business plan in the first place. And in many states, it is required by law for a limited liability company to list on their website their purpose for forming. This legal statement is also known as a general-purpose statement and should be included in your articles of organization when registering your company as an entity within the state you operate within. 

On the other hand, a specific purpose statement is a one or two-sentence that reflects a more focused version of your general statement. Not all states allow LLCs to file a general purpose statement. Therefore, if this is the case, you will be required to add more information to your statement when filing. 

Purpose Statement vs. Mission and Vision Statements 

Furthermore, a common mistake businesses make is confusing their business purpose with a mission statement and vision statement. Therefore, to make sure you don't make the same mistake, here are the differences between these statements: 

Mission Statement: A company mission is a one or two-sentence statement that reveals your business activity and who you serve. It is essentially your company culture and how your brand will interact with its customers

Vision Statement: A company’s vision is an outline of your business goals and your company’s future. 

Tip: One of the most common FAQs we get is whether a limited liability company's business activity needs to remain the same. And the answer to this question is no. In fact, LLCs are highly flexible and can be changed as your business grows in the future. While you can formally change your business activity or purpose by filing an amendment, it's only legally required to file your initial documentation. Therefore, in the future, you can decide for yourself whether you wish to file a formal document to change this. 

LLC general purpose statement

Again, an LLC general purpose statement is a one or two-sentence blurb that indicates the purpose of why you formed your business. This is for legal purposes only and does not need to require any words meant to empower people's lives. For example, in most states, business owners can simply put: “you are organized to pursue lawful business activities in (your state).” 

For example, here is a look at Microsoft's general-purpose statement is: "The Corporation is organized for the purposes of transacting any and all lawful business for which a corporation may be incorporated under the Washington Business Corporation Act." 

As you can see in the example above, nowhere in that general statement does it indicate what it is Microsoft does-- because it doesn't need to. For legal reasons only, their company has fulfilled its duty when registering its purpose with the state. Therefore, they are not required to do anything else with this general statement. 

What a general LLC purpose statement should include 

Generally speaking, an LLC statement of purpose should state that the business was formed to undertake every activity an LLC can legally embark on in a specific state. Therefore, it is best to keep the statement as nonspecific and general as possible so your declaration will not need to be changed later down the line as your business grows. 

LLC specific purpose statement

Moreover, a specific purpose statement is a one or two-sentence statement that reflects your company's reasons for doing business. For example, is your core purpose for a business to connect people worldwide by launching a social media platform like LinkedIn? Or is your core purpose of promoting the well-being of others through accessible mental health services? Whatever your why is, your company purpose statements are meant to show your target audience what your company reflects. 

And in many ways, this specific purpose statement will be used in your marketing strategies as a business. For example, are you an eco-friendly company that wants to reduce the number of plastics in the ocean? If so, your specific purpose statement should reflect this. 

For example, if you were an educational institution looking to provide online courses to students worldwide, your specific statement may be: “The LLC business believes in providing accessible online educational materials and classes to inspire success in the next generation of students one course at a time. 

What a specific LLC purpose statement should include 

Regardless of what you choose your specific statement to be, it is essential that you keep it as precise and short as possible. However, you should also attempt to use thought-provoking wording that is captivating. That way, it will stand out to your target audience when they come across your business website. 

So, remember to dig deeper into the why behind your company and why it exists in the first place. In addition, you will also want to do some research into other similar companies in your sector and see what they have written. That way, you can get a better idea about how you should structure your own specific statement. Nonetheless, remember to include some of the elements listed below to make your statement more specific to your company. 

  • The name of the founder of the company
  • Your business name 
  • The date of the company's formation is specific 
  • The company's market status 
  • The legal organization of the company. For example, is it a non-profit, public, private, corporation, or something else?
  • Your company’s products and services you will be providing to consumers 
  • A description of the products or services in more detail 
  • Your company’s target audience. For example, students, sports enthusiasts, new mothers, etc. 

LLC non-profit purpose statement

Moreover, in most states throughout the United States, legislation has been passed that allows non-profit organizations to register as LLCs. Therefore, if you are in a state that will enable you to do so, you will also need to file an LLC statement of business purpose. However, your business purpose statement must clearly indicate that you are operating exclusively for charitable purposes. In addition, the wording you choose for your purpose statement will not only affect your authorization to do business but also how your organization receives tax exemption from the IRS. 

Generally speaking, most non-profit organizations will seek a 501(c)3 status. This essentially provides your non-profit with federal income tax exemptions along with the ability to receive charitable contribution tax deductibles. Therefore, your purpose statement is key to the IRS when considering whether or not they will grant you this classification. In other words, it is highly important that any non-profit purpose statements that also wish to register as a limited liability corporation be flawless.

When choosing between a general and specific statement, it may be best to craft one that is broader rather than focused. This is because it will allow your non-profit organization to evolve over time without infringing upon the articles of incorporation you filed when you first established your non-profit. In addition, it will also provide you with more flexibility when allocating charitable funds. For example, if your purpose statement includes "to restore and maintain the new ____ park in the community," you will not be able to legally use the funds for other parks or other projects later down the line. Therefore, if you file your articles for incorporation with a general statement, then it is highly recommended that you do so. 

Business purpose example statements

Furthermore, now that we have distinguished between general and specific business purpose statements, along with how to formulate your non-profit LLC statement, let’s take a closer look at some example statements that will help you get a better idea of how to craft your own. 

Technology & Appliances: 

Google Statement: “The purpose of this Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.”

General Electric Statement: “To manufacture, process, construct, develop, assemble, and produce in any way, to sell, lease, supply, and distribute in any way, to purchase, lease, mine, extract, and acquire in any way, to own, operate, experiment with, deal in, service, finance, and use in any way, equipment, apparatus, appliances, devices, structures, materials, processes, information, tangible and intangible property, services and systems of every kind, nature and description.”

Charities: 

UNICEF Statement: “To work with others to overcome the obstacles that poverty, violence, disease, and discrimination place in a child’s path.”

Red Cross Statement: “To protect life and health and to ensure respect for the human being.” 

Transportation: 

Southwest Airlines Statement: To connect People to what's essential in their lives through friendly, reliable, and low-cost air travel.”

Delta Airlines Statement: “We connect people to opportunity while expanding the understanding of our planet and the people within it. We know that both in the air and on the ground, our business decisions have the ability to influence and change the world.”

Food & Beverage: 

Coca-Cola Statement: “Refresh the world. Make a difference.” 

Whole Foods Statement: “Our deepest purpose as an organization is helping support the health, well-being, and healing of both people –customers, team members, and business organizations in general—and the planet.” 

Retail: 

Crayola Statement: “Encouraging children to be creative and enabling parents to inspire them.” 

Lego Statement: “To inspire and develop the builders of tomorrow.” 

Final Thoughts 

As you can see, there is a lot more that goes into an LLC statement of business purpose than you may have thought initially. Regardless, it is essential that business owners craft a meaningful and purposeful statement when writing out the business plan that will not only allow them to remain within their legal requirements but also allow them to evolve later down the road. Whether you choose to write a general or specific statement, remember to use concise yet captivating wording that also reflects who you are as an organization. 

References: 

  1. https://calnonprofits.org/10-feature-articles/201-step-by-step-guide-for-starting-a-california-nonprofit 
  2. https://www.microsoft.com/en-ca/about/ 
  3. https://www.upcounsel.com/llc-purpose-statement-example#:~:text=An%20LLC%20purpose%20statement%20is,on%20in%20a%20given%20state

5 Steps To Form Your LLC

1
Choose an available business name
2
Designate a registered agent
3
File all your state-required paperwork (Articles of Organization, operating agreement, etc.)
4
Get a federal tax ID (EIN) number
5
Make sure to pay all mandatory annual fees and state fees
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