Business Purpose Examples: When and How To Write One for an LLC

By Indeed Editorial Team

Updated March 16, 2021 | Published February 8, 2021

Updated March 16, 2021

Published February 8, 2021

Filing for an LLC is one way to start a business and protect all business owners financially. Business owners who file for an LLC need to submit certain documents, like a business purpose. In this article, we discuss the importance of a business purpose, as well as a few business purpose examples, based on industry type.

Related: How To Write a Personal Mission Statement

What is a business purpose for an LLC?

A business purpose describes the reason, or purpose, that a company was initially founded. It describes what makes a business unique, as well as what the business plans to do. A business purpose is not a mission or value statement and is much shorter than both. Whereas a mission statement is used to identify the purpose or values of the company, a business purpose is a legal phrase used when filing a limited liability company (LLC).

Some, but not all, states require a business purpose statement when filing for an LLC. This statement is often included with the Articles of Organization. This statement informs the state of the reason why you are forming an LLC. Some states require that you check a box with the LLC's purpose, while others may require a more specific purpose statement.

Even if you live in a state in which a detailed business purpose statement is not required when filing an LLC, it can be helpful to write one. A business purpose statement can help you define the goals and intentions of the business, as well as describe the services offered to a customer. It can also give brands a competitive edge by having clear goals. Some business owners also use the business purpose statement as a starting point for writing their mission statement.

Companies may also turn to their business purpose to make decisions or create policies. Additionally, some businesses may use the business purpose statement to ensure any changes align with their initial purpose.

Related: How To Register a Business Name

How to write a business purpose for an LLC

You can write a business purpose for an LLC with the following steps:

1. First, start by researching your industry

It can be helpful to begin the process by looking at other businesses in your industry to see what they include in their business purpose statement. Researching competitors can also help you understand what services other businesses offer. This may provide you with a list of tasks or purposes that you had not previously considered.

2. Then, consider why you started the company

Ultimately, a business purpose is a statement defining why you are in business. Take a few minutes to consider why you formed the business in the first place, as well as why an LLC is important to the business' goals.

3. Then, consider how the business will operate

Think of the specific steps you can take to achieve the reason for forming the business and how that may impact customers.

4. Finally, write your statement in a way that is concise and clear

Because a business purpose should only be a sentence or two, it is important to write it in a way that is concise, yet clear.

Related: How To Set Business Goals With Examples

Examples of business purposes for LLCs

Here are a few LLC business purpose examples, covering different types of industries:

  • Real estate: The purpose of Big Estates is to assist buyers and sellers with the sale and transfer of property, as well as manage licensed agents who provide the same.

  • Retail goods: The purpose of Online Purchase Connections is to evaluate, market, procure and sell products to the general public through eCommerce and physical storefronts.

  • Personal services (like spas, hair salons, estheticians, massage therapists): The purpose of Beauty Tech Associates is to procure and sell retail products and provide rentable space for licensed technicians to provide beauty services to the public.

  • Advertising: The purpose of Analytics Services is to study the industry desired by the client and provide feedback on marketing strategies and tactics to gain competitive advantages in return for increasing revenue.

  • Legal services: The purpose of Practical Legal is to employ and market licensed legal professionals that provide legal consultation and representation to clients in the areas of personal injury and workers' compensation.

  • Manufacturing: The purpose of Biggest Suppliers is to secure raw materials and consumer goods to deliver to commercial and consumer companies.

  • Information technology (IT): The purpose of All-Around Amazing Tech is to employ certified technicians who provide specialized services to assist end-users in technology needs, while also providing technical consultation and implementation.

  • Automotive: The purpose of Hot Rod Inventory and Repair is to maintain a vehicle inventory and a place of business where consumers can purchase automotive products and accessories, while also offering repairs.

Related: 15 Good Businesses To Start Today

Tips for writing a business purpose

Here are a few tips that you can use when defining the business purpose:

  • Look up the specific laws in your state. Some states may have specific requirements on the business purpose statement when filing for an LLC. Looking up these laws ahead of time can ensure that you meet these requirements.

  • Consider your daily responsibilities. By considering the tasks that you complete each day, you can narrow down the business' purpose. Write a list of tasks the business needs to complete each day, then find a way to combine these tasks with a brief statement.

  • Keep it short. Because a business purpose should be concise and to the point, aim for one to two sentences. This also allows you to add to the business' purpose if it expands later.

  • Use the mission statement for inspiration. It can also be helpful to revisit previously drafted statements, like the mission or value statement, to remind yourself of the goals and intent of the business.

  • Enlist the help of friends or a coworker. By having friends or coworkers review the business purpose statement, you can get an outsider's view. This ensures that your statement is clear and accurately describes the business.

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