Are you in the process of forming an LLC and need to draft an operating agreement? Look no further! An LLC operating agreement is a crucial legal document that outlines the decision-making processes, contributions, and ownership of the entity. It is an essential record of each member's ownership interest.
State-Specific Operating Agreements
Before diving into the details, it's important to note that operating agreements can vary from state to state. Here is a list of LLC operating agreement templates organized by state:
- Alabama
- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Vermont
- Virginia
- Washington
- Washington D.C.
- West Virginia
- Wisconsin
- Wyoming
Different Types of LLC Operating Agreements
Now, let's take a closer look at the two main types of operating agreements available:
Single-Member Operating Agreement
If you are the sole owner of an LLC, a single-member operating agreement is the perfect choice for you. This template is specifically designed to meet the needs of LLCs with only one owner. Download it in PDF, MS Word, or OpenDocument format.
Multi-Member Operating Agreement
For LLCs with multiple owners, a multi-member operating agreement is the ideal option. This comprehensive template addresses the specific requirements of LLCs with more than one owner. Download it in PDF, MS Word, or OpenDocument format.
What is an LLC Operating Agreement?
An LLC operating agreement serves as the official bylaws of the company, covering important aspects such as ownership, management, officers, and the registered agent. It is an essential document when opening bank accounts and demonstrating the ownership structure of your LLC, particularly if any member owns more than 25% of the company.
According to Cornell Law's definition, an operating agreement is a governing contract adopted by LLC members. It regulates various aspects of the LLC's affairs, such as business management, asset utilization, and revenue sharing. An operating agreement takes precedence over default rules outlined by state LLC statutes in the absence of an agreement.
Find out more details about operating agreements by visiting Cornell Law's website.
What to Include in an LLC Operating Agreement?
To create a comprehensive LLC operating agreement, you should consider addressing the following five key items:
Members
Whenever a new member joins the LLC or there is a change in ownership, the operating agreement must be amended with the written consent of all existing members. This ensures that all members have a clear understanding of each other's roles and responsibilities.
Distribution of Profits
Disbursing profits to LLC members is a straightforward process, as each member is individually responsible for paying taxes on their share of the income generated by the business.
Flexibility
When drafting your LLC operating agreement, you have the flexibility to tailor it to your specific needs. Whether you prefer a simple structure or would like to incorporate additional regulations, an LLC offers more flexibility compared to other business entities.
Pass-Through Taxation
One of the significant advantages of an LLC is pass-through taxation. The business itself does not incur taxes. Instead, each member pays taxes based on their personal income from the LLC's profits or losses.
Protection
LLC members enjoy limited liability, meaning they are not personally liable for the company's debts and liabilities. This added protection is a significant factor in choosing an LLC structure over other entity types.
Sample LLC Operating Agreement
To help you get started, we provide a sample LLC operating agreement template that you can download in PDF, MS Word, or OpenDocument format. This template serves as a useful reference to ensure you cover all the necessary elements in your own operating agreement.
Download the sample LLC operating agreement here.
Related Forms
In addition to the LLC operating agreement, you may require other forms to supplement your LLC's legal documentation. Here are two related forms that you might find helpful:
Amendment to an LLC Operating Agreement
If you need to make changes or updates to your existing LLC operating agreement, you can download the amendment form in PDF, MS Word, or OpenDocument format.
Download the amendment form here.
Corporate Bylaws
For additional legal documentation needs, such as establishing the governance and internal rules of your LLC, consider downloading the corporate bylaws form. It is available in PDF, MS Word, or OpenDocument format.
Download the corporate bylaws form here.
With these LLC operating agreement templates and related forms, you can confidently navigate the legal requirements of forming and managing your LLC. Create a high-quality document now to ensure a smooth and successful journey for your business!