LLC Operating Agreement Overview
An LLC operating agreement outlines the business’ financial and functional decisions, including rules, regulations, and provisions to govern the internal operations. It defines each member’s roles, responsibilities, rights, the decision-making process, what happens when a member leaves or enters, dispute resolution, and dissolution.
Notarization and Legality of Operating Agreements
- An LLC operating agreement does not need to be notarized.
- Once members sign the Operating Agreement, then it becomes legally binding.
Importance of an Operating Agreement
- An LLC operating agreement sets clear rules and expectations for members, helping resolve disputes and streamline operations.
- It is highly recommended that all LLCs have one.
Single Member Operating Agreements
Single member LLC operating agreements lay out rules and bylaws of a company, including details on ownership, permissions, and procedures when certain scenarios occur.
Additional Consideration
- With virtual notarization, it’s possible to notarize remotely if identities and signatures can be confirmed.
- The drawback is additional time and cost.
Required Operating Agreements
- Maine, Missouri, and New York legally require LLCs to have an operating agreement.
Recording of Operating Agreements
- If recorded, operating agreements would need notarization, but they usually aren’t recorded.
Consulting a Lawyer
- If you see significant risk, get a lawyer.
State-specific Requirement
- An operating agreement is recommended but not required in Wyoming.
Relationship Governance and Ownership
- In a dispute, the agreement governs the relationship.
- Ownership is not restricted, so anyone can be a member.
Bank Document Requirements
- Call the bank to see what documents are required and if notarization is needed.