LLC Operating Agreement

A very important document for any limited liability company (LLC) with more than 1 member/owner is the Operating Agreement.

It is not necessary to have an Operating Agreement in order to set-up a LLC, but it very beneficial to have one.

An Operating Agreement is a contract that lays out all the rules of an LLC. There is no form for this or a standard that needs to be followed, but it should typically cover the following items:

• Who the owners of the limited liability company are
• How profits and/or losses will be shared by the owners
• Who has voting powers, how the voting process works, and what decisions will be determined by vote
• Areas of the business that each owner will be responsible for
• What the process is for a member to voluntarily withdraw their interest in the business
• What happens in the event of death of one of the members

The Operating Agreement should be signed by all members and notarized.