An operating agreement outlines the finances and roles of LLC members. LLCs with multiple members should have one, even if not required by law.
Can I Make My Own Operating Agreement?
Get together with co-owners and a lawyer to figure out what to cover. Then answer simple questions and have everyone sign to make it legal.
Does a Single Member LLC Need an Operating Agreement?
An operating agreement lays out company rules even for single member LLCs. Most include: organization details, management structure, member contributions, and voting procedures.
- It helps define the roles and responsibilities of each member.
- It helps solidify the limited liability status of an LLC.
- It clarifies member roles and responsibilities regarding decision-making authority.
Key components include decision-making processes, how profits and losses are divided, and dispute resolution processes. The more specific the agreement is, the better. Flexibility is also key to suit the LLC’s needs.