A Perfect Operating Agreement in 2 Easy Steps:

1. Answer a number of
simple multiple choice questions

2. View your customized Operating Agreement

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Create Your LLC Operating Agreement Checklist

1. Decide a name for your LLC
2. Principal Office
3. Registered Agent/Office
4. Initial members
5. Decide the ownership interests of each member
6. Decide the amount of capital each member will contribute.
7. Will any members be granted an interest solely for the performance of services?


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WHY EVERY LLC NEEDS AN OPERATING AGREEMENT?

The LLC Operating Agreement is the core document that is referred to when issues concerning the LLC need to be resolved. The LLC Operating Agreement is the most important document for your LLC. By having an LLC Operating Agreement, the members will be provided with a clear set of rules that all members have agreed upon, greatly reducing the likelihood of disagreement between members in the future. It is extremely important that you create an Operating Agreement for your LLC entity. Without the formality of an agreement, the basic operation of the LLC would be governed by state law, which may not be advantageous to the LLC, it members, or the business it conducts. Each state LLC statute contains basic operating rules for LLCs, some of which will govern your business unless your Operating Agreement states otherwise (these are called "default rules.").

Don’t let the State tell you how to run your LLC

Many state LLC statutes, for example, have default rules that govern how certain business decisions should be made, such as how the LLC will be managed, rules for holding meetings and taking votes, rules for the sale of the LLC, how profits and losses should be allocated, amending the Operating Agreement, admitting a new member, and dissolving the LLC. Defaulting to state law for important LLC decisions could jeopardize your business. If you don’t want the state to tell you how to run your LLC, it’s important that you have a well drafted LLC Operating Agreement. By having an Operating Agreement, you can decide the rules that will govern your LLC's inner workings, rather than having to follow state default rules that may or may not be right for your LLC.

Protect your Limited Liability Status

Even though the LLC Operating Agreement is not required to be filed with any state agency, it is unwise to operate an LLC without an LLC Operating Agreement, even if you're the sole owner of your LLC.

It is extremely important that you create an Operating Agreement to separate yourself as an individual from your LLC, even if you are the sole owner of your LLC. Without the formality of an Operating Agreement, the LLC can closely resemble a sole proprietorship, which does not limit your personal liability for business debts of the LLC. Without an LLC Operating Agreement, the basic operation of the LLC would then be governed by state law, which may not be advantageous to the LLC, it members, or the business it conducts.

 

 
Disclaimer: The information provided in this site is not legal advice, but general information on legal issues commonly encountered. Neither myLLCoperatingagreement.com nor myLLCagreement.com is a law firm and neither is a substitute for an attorney or law firm. This site is not intended to create an attorney-client relationship, and by using myllcoperatingagreement.com or myLLCagreement.com, no attorney-client relationship will be created with myllcoperatingagreement.com or myLLCagreement.com.