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About LLC Operating Agreements

In some respects, Operating Agreements play a similar role as bylaws play in a corporation. The Operating Agreement is the central document that governs the internal workings of your corporation. The Operating Agreement will normally address topics like:

• Who will manage the business of the LLC
• Who are the members (owners) and what are their respective ownership shares.
• How are profits and losses allocated among the owners.

Some state laws do not legally require you to have an operating agreement, but it is never wise to operate a company without adopting such an agreement. Without an operating agreement, there are no internal rules for operating or governing the company. This can lead to unnecessary disputes between owners over a variety of issues that can arise on the normal operation of a business.

Perhaps even more importantly, the lack of an operating agreement can be used to show that your company does not have a separate legal existence and that you have treated it as an alter ego. This can lead to loss of separation of liability and can expose the personal assets of the owners to the liabilities that arise with the company. Therefore, even single owner LLCs should maintain formalities including the adoption of an operating agreement.

Sample LLC Operating Agreements - LLC Forms - Operating Agreements - LLC Regulations - Limited Liability Company Forms