Operating Agreement for LLC (Free Template and Walkthrough)
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- เผยแพร่เมื่อ 11 ก.ค. 2024
- Attorney provides you with a step-by-step video walkthrough of how to create your own Operating Agreement for your LLC for FREE! You can then download your free Operating Agreement for LLC template. Go here for your free template LLC Operating Agreement (from Law Depot): bit.ly/OperatingAgreementLD (I may earn a commission if you select my link, at no extra cost to you. This supports my channel, thanks!).
Note that by using my link you will get a 10% discount if you choose any option other than the free Operating Agreement (which is free if you download it within the free trial period). I chose Law Depot as the source for your free template LLC Operating Agreement because they have a good reputation and have been in business since 2001. However, I cannot vouch for their legal compliance, and I'm not providing you with legal advice.
It's important to follow certain steps after you form a Limited Liability Company to ensure liability protection and personal asset protection. The most important step is creating your LLC's Operating Agreement. To learn more about the other 5 primary steps with 5 additional tips for after you set up your LLC, go here: • What To Do After Formi...
If you prefer a very high quality attorney-drafted Operating Agreement (and/or other contracts and forms), note that a related company of mine is offering them at a fraction of the price you'd pay an attorney. Go here to learn more (and receive a 10% discount): www.attorneydrafted.com.
If you want more details on what should go into your LLC Operating Agreement, go here:
• What to Include in You...
If you need a virtual office address so you can have a professional address outside your home, this company is in almost all states (and some other countries as well): bit.ly/AllianceVirtualOffices (affiliate)
If you need an EIN (Employer Identification Number / Tax ID) for your LLC (or other entity), I show you how get one quickly and for free here: • How to Get an EIN Numb...
If you have not yet set up an LLC, the link to my video on "How to Form an LLC (Limited Liability Company)" is:
• How to Create an LLC I...
If you are not yet sure what entity is best for you, here is the link to my video on how to choose the best entity for your business:
• LLC vs S-Corp vs C-Cor...
If are doing business in California and you prefer to have an attorney form your entity or draft your contracts, feel free to reach out to me via my website: www.chrisjacksonlaw.com.
00:00 Intro - Free Operating Agreement for LLC
00:40 Why You Need an Operating Agreement
01:47 Link to Download Free LLC Operating Agreement
02:51 Walkthrough of How to Create LLC Operating Agreement
Thank you!
Best regards,
Chris Jackson
@cjlawvideos
//BIO//
Hi, I'm Chris Jackson. I have over 25 years of experience as a business attorney. I'm also an entrepreneur who has owned, managed and sold at a significant profit multiple franchise coffee houses. In addition, I have finance and operational experience as a Chief Operating Officer (COO) of a large company. I just started this channel in February of 2023 to share information which I hope you will find valuable.
//DISCLAIMER//
Disclaimer: Note that nothing in this video is intended to create an attorney-client relationship. This video and my channel are for general information and entertainment purposes only and should not be construed or relied upon as legal or tax advice (generally or specifically). You should not act or rely on any of the information contained herein without seeking professional legal advice.
//TAGS//
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Get your free template LLC Operating Agreement here: bit.ly/OperatingAgreementLD. If you choose something other than the free option, you will get a 10% discount by using my link. I hope you found the video helpful, and if you have any questions, please let me know! Also, If you want a walkthrough on other contracts, let me know what I should cover next:
1. Employment Agreement;
2. Non Disclosure Agreement (NDA);
3. Commercial Lease; or
4. Residential Lease?
Thank you!
Will do. Thank you, and I appreciate your quick response on this!
@@JosePereiraAlfonzo Hi Jose. No, it is not required to get your Operating Agreement notarized. That's an option, but most people do not do that. Let me know if you have any other questions. Best regards, Chris
Wow! This video was a god send - Helped me get my operating agreement completed with ease
That's great to hear, thank you! Best regards, Chris
Jack wants to get involved in Consulting, he think you are single member, so we need to add him as a Member 😂😂😂
Agreed!
I needed this. No more confusion of any kind. Thank you!
I'm glad you found it helpful, thanks! Best regards, Chris
This video is pure gold. Thanks for sharing this valuable information to all of us
Thank you for the kind words, and I'm glad you found it valuable! Let me know if you have any questions. I wish you and your LLC all the best. Best regards, Chris
What a lifesaver! And I'm in CA also. I often find other videos from professionals in other states. This was refreshing and so helpful! Thank you for the walk through process and explanations. This whole process of starting an LLC is daunting. You helped me in my final process, thanks again! You've gained a new sub in me!
Thank you so much for your kind words! I'm glad it was helpful, and let me know if you have any other questions in your LLC/business journey. Best regards, Chris
Thank you, Mr. Jackon, you have great teaching style.
Thank you! I appreciate the kind words, and I'm glad you found it helpful. Best regards, Chris
Great video Chris thank you! Information was solid clear and simply explained with a well balanced tone voice. Good job man looking forward to watching more of your videos as I'm currently structuring a new LLC now. My last business was not fully structured the way I wanted and failed due to the plandemic but this time around I will be protected and structured to look homeless on paper but wealthy in reality 😂😂😂
Hi DJ. Thank you for the kind words. They are much appreciated! Best regards, Chris.
Thank you so much for sharing this video. I was able to create and download my LLC Operating Agreement by using this template and your walkthrough video.
That's great to hear, thank you! Best regards, Chris
That worked perfectly, thank you.
Great to hear, thank you!
Thank you very much for this very informative video, I will use your link to complete my operating agreement when time comes. God bless you!
You are very welcome. I'm glad you found it helpful. Let me know if you have any questions. Best regards, Chris
Thank you for Chris for this video , it was easy to understand and follow.:)
Glad it was helpful, thanks! Best regards, Chris
This video is so helpful, thank you!!
Glad it was helpful, thank you! Best regards, Chris
Thank you for this solid information, Chris.
You are welcome! Best of luck to you and your LLC! Best regards, Chris
Thank you for the excellent video. I love Jax joined as it made it very personable and as a fellow pet parent, TOTALLY understand!
Hi: Thank you for your kind words. And, I agree about Jax. (My wife wants me to feature him more because he's the real star). Thanks again! Best regards, Chris
This was a big help Thank you!
Glad to hear that, thank you! All the best ... -Chris
This was great, easy to understand.
Thank you for your kind words, and I'm glad you liked it! Best regards, Chris
Thank you so much for this information.
You are very welcome! Thanks for watching my video, and let me know if you have any questions.
Thanks for sharing your knowledge I just used link and completed O/A.
Thank you for your kind words, and I'm glad you were able to obtain your LLC Operating Agreement! Best regards, Chris
This is great information and tutorial!!! Thank you so much!! I will totally use your affiliate code, you deserve tons of commission!! Thank you!
I appreciate your kind words, thanks! Please let me know if you have any questions. Best regards, Chris
Thanks! Great video.
Glad you liked it, thanks! Best regards, Chris
thank you for the great video and general information. blessings
Thank you for your kind words ... I'm glad it was helpful! Blessings to you as well, thanks! Best regards, Chris
Good video. Thanks for posting.
Thanks for watching!
im currently in the process of acquiring the bonds required by CSLB for a new Tile installation company and i need to present this document to be considered. Thank you so much for this video and i just now printed the document. i might be signing up with this website since i just noticed they have and provide a lot of documents i might need in the future such as the mchanics lien amongst others. thank you so much for this video !
Thank you for your kind words, and best of luck to you and your tile installation company! Best regards, Chris
awesome dog!
your advice is gold too…
Thank you very much for your kind words! Glad you found it helpful (and appreciate my dog Jax, who is the best part of all of my videos). Best regards, Chris
Thank u made it really easy
You're welcome, and I'm glad you liked it! Best regards, Chris
Thanks a billion.
You are welcome! Best of luck to you. Best regards, Chris
Thank you Attorney Chris
You are welcome ... glad you found it helpful! Best regards, Chris
@@cjlawvideos Do you mind if I recommend you as a Business Attorney to some of the members of my membership community?
@@averagehealthyguy9189 Hi. Thank you for the offer. That's very kind. Just note that I'm only taking on new clients who either reside in California or are doing business in CA. My website is www.chrisjacksonlaw.com. Thanks again! Best regards, Chris
@@cjlawvideos Ok, I'll tell my members who live or do business in California.
Awesome videos, Chris. Thank you for clearly explaining everything in an easily digestible manner.
At the 18:11 mark in the video, you talked about "Dissolution of the Company." Are you planning on making a separate video about the process of dissolving an LLC?
Thank you!
Hi Joe: Thank you for your kind words! I really appreciate them. And, thank you for the video idea tip ... I absolutely should and will do a video on how to dissolve a company. I just added it to my list, thanks! Best regards, Chris
Just a quick follow up on this question. If I create a LLC to purchase a business, should the capital contribution be the purchase price that I put in the LLC to purchase the business? Thanks!
@@ThanhNguyen-lk7xv Hi. I cannot give legal or tax advice without being retained, but yes you could characterize the money you put in to purchase the business as follows: (i) all capital contribution as you stated, or (ii) part capital contribution and part member loan to the LLC (the latter of which is repayable by the LLC to you). This is something you can discuss with your CPA as to the best way to characterize money put into your LLC. However, as the default, money put into the LLC is usually characterized as capital contribution (both the initial amount when you form the LLC and later contributions as needed once the LLC is up and running). I hope that helps. Best regards, Chris
Thanks for the great video!Does s-corp need a operating agreement or something else of that kind?
Thanks for watching and for your question. Corporations have something similar to an Operating Agreement, but they are called Bylaws. I will make a video on how to create corporate Bylaws for free. Thanks! Best regards, Chris
Thank you Chris. Great video.! I am a bit confused about one thing. When creating the actual LLC with the state, do we register it as a multi member llc or does the operating agreement tell that.
Thank you for you kind words. That is a good question, and it depends upon the state.
For example, in WY (my favorite LLC state), you don't publicly disclose who the members are when you form the LLC. That is done in the Operating Agreement.
In Arizona, by contrast, you do make this disclosure. In CA you do not disclose when you file, but you have to later disclose on the annual report (statement of information) either the name of the Manager or one of the Members.
With that said, the bottom line is that in most states you handle whether it is a single member or multi-member LLC in the Operating Agreement.
Note that I have videos on how to form LLCs in multiple states (as of now, WY, DE, CA, TX, & FL).
Also note that a related company of mine has attorney-quality legal templates (including Operating Agreements) at a fraction of what you'd pay an attorney. The Operating Agreements are done, but I have not yet finished the video instructions. If you are interested, you can check it out here: www.attorneydrafted.com.
Please let me know if you have other question, thanks! Best regards, Chris
Hi Chris, thanks for all the concise LLC formation videos so far.
Is there any other subject for LLC formation that you can think of that may be made into another video?
One question, For Capital Contributions in the Operating Agreement, should they be higher or lower and what are the advantages of going each way?
e.g. >
A $1000 cash + $5000 sweat equity
B $1000 cash + $25000 sweat equity
Hi Michael.
Thank you for your kind words, and yes I plan on squeezing in a couple more videos to the LLC collection. My next one is how to set up an LLC in Delaware.
Regarding capital contributions, note that the cash you put into your LLC can be characterized as either equity capital contributed or cash loaned or a combination of both. You should probably check with a CPA as to what characterization works best for your particular situation.
Note that the more you apply towards capital contributed, the higher your "basis" in the LLC (so if you sell your LLC interest later, the higher the basis you have, the less you'll pay in capital gains tax).
And, if you characterize any of it as a loan to the LLC, then you should actually create a Note by the LLC to you, add the minimum required interest, and make sure the LLC pays you back per the terms of the Note.
In most cases, the "loan" characterization is more complicated and thus not used, at least initially. You can always decide how to characterize what later when discussing with your CPA.
But, for purposes of the "Initial Capital Contribution" in the Operating Agreement, I would generally book some or all cash (and possibly a reasonable value of sweat equity) towards the Capital Contribution. If you put in cash later, you can decide how to characterize such cash (capital contribution or loan to LLC) at a later date and in conjunction with your tax advisor's recommendation.
Hope that helps!
Best regards,
Chris
@@cjlawvideos Hi Chris, for the cash capital contribution, would it be sufficient to have it documented in the operating agreement to have it as basis later on when selling the business? Do I need to transfer the cash to the LLC which is then paid to the seller by check or would it be okay to pay directly from my personal account initially since business account has not been set up yet?
Thanks again for your response!
@@ThanhNguyen-lk7xv Hi Thanh. I can't give you legal advice without being retained as your attorney. Here are some general principles to consider. First, the "initial capital contribution" to the LLC as referenced in your Operating Agreement can be any amount you like, large or small. I would just make sure that, let's say it is $500 for example, you need to actually transfer the $500 from your personal account into the LLC's bank account. Second, additional funds put into the LLC would be either "additional capital contributions" or member loans to the LLC (or both). That is really a question for your CPA, but most people just characterize the additional funds put into an LLC as additional capital contributions. Third, for the business acquisition, if you could wait until the LLC account is open, in general it may be cleanest/best for your LLC to acquire the business using its own funds. If you cannot wait, I suppose you can transfer the business into the LLC at a later date, but again, please seek your own counsel on the specifics. Best of luck, thanks! Best regards, Chris
Hey Chris your videos are great. I’m planning to start an adult baseball league in my city. Should I create an LLC for this ?
Hi. Thanks for your kind words, and I'm glad you are finding the videos helpful. Although I cannot give legal advice without being retained, for the reasons set forth in this video (th-cam.com/video/vPc2bt0lCkI/w-d-xo.html), I generally prefer an LLC over a sole proprietorship or other entities. This presumes that the LLC will be for-profit. If it is a non-profit endeavor, then you may need to set up a non-profit corporation (e.g., a 501(c)(3) non-profit corporation). I hope this helps, and I wish you and your baseball league all the best! Best regards, Chris
Chris, thank you for this walk-through! Question - on the Membership Details page, if I’m setting up a Wyoming LLC - which will ultimately “house” or “oversee” the LLC’s I form in different states where my rental properties are located - should I select “Individual” or the last option, “Partnership, Trust, or LLC”?
Thanks for your great questions, and I look forward to chatting with you about them. Best regards, Chris
Very good explanation. I'm starting to follow all your videos. In my case I should put ''disregarded entity'' in ACCOUNTING since I'm a non-resident and the forms I have to fill out are form 1120 and form 5472?
Hi Francisco. Thank you for your kind words. While I cannot give tax advice, as a non-resident you should be able to choose any tax status except to be taxed as an S Corporation. If you are a single-member LLC, your two options would generally include to be taxed: (i) as a disregarded entity (which means you file the forms you referenced above) or (ii) as a C Corporation. However, the C Corp tax rate (currently about 21%) is greater than the self-employment tax of a disregarded entity (15.3%). If you are a multi-member LLC, you can choose to be taxed as a Partnership.
I hope that helped, but if not, please let me know. Thank you for subscribing! -- Best regards, Chris
@@cjlawvideos Thank you Cris for responding quickly, it is a single member and passive income
@@francisco1882 Ok, great. Sounds like you are on the right track.
Thanks Chris, Great Video, Can the operating agreement be made any time after forming an LLC? like a year later ?
Thank you for your kind words. Yes, you can create the Operating Agreement later. If you have had an LLC for a year and don't have one, it is certainly better to create one late than to not create one at all. The sooner the better though, as the Operating Agreement dictates how the LLC is managed, makes profit distributions, etc.. You want to act in accordance with the Operating Agreement. Best regards, Chris
Choosing to be taxed as an S Corporation to avoid the SE tax - if your net profits are too low, the cost of avoiding that tax can cost you more than that tax if a Single member LLC. Looks like good legal advice but seek tax advice before deciding this choice.
Yes, I agree that one should always get tax advice (including tax elections) from a CPA. But, if they are going to take the S Corp tax election, they need to make sure it is taken at the appropriate time because it is easy to miss the filing windows (which are after entity formation and the 15th day of the 3rd month of each tax year thereafter).
Hi Chris at Timestamp 5:09 when filling out the section about Company Details, what should you put for "Where is the company's principal office located?" If you registered in a state like WY (not your home state) and are using a registered agent? Are there any privacy concerns with the choice of which address to put? Can I put the Registered Agent Address? Thank you for this video and the one on how to set up your LLC! These videos are super helpful!
Hi Crystal. Thank you for your kind words. They are much appreciated.
The principal office is supposed to be where your LLC does business. It doesn't have to be in Wyoming for a WY LLC (though Incfile does provide a WY virtual office address for you for an extra fee). For example, if you live in and are doing business in CA and are creating a WY LLC, you would use your CA business address. This can be your home address, your office address (if applicable), your retail address (if applicable), etc.
If you need a virtual office address so you can have a professional address outside your home, this company is in almost all states: bit.ly/AllianceVirtualOffices. They are an affiliate of mine (it won't cost you anything more), but I use them myself.
With all that said, the Operating Agreement is an internal document, and it will thus not be made public. If you are concerned about making your home address public, there is no need to worry about that with the Operating Agreement.
Hope that helps!
Best regards,
Chris
Great video Chris; lots of good info. Without offering legal advice, would you please offer your thoughts on capital contributions. I'm a lone member. I take it, sweat equity means for me to put a value on what I put into getting the business started. Until I actually make a profit, I take it cash assets will be the cash I put into my business checking account to pay my credit card off for business expenses. Am I on the right track? Thanks!
Hi. Thanks for watching and for your question.
As you said, I cannot give legal advice without being retained. FYI, a related company of mine goes into great detail answering those questions in its LLC "Next Steps Guide" (which you can check out here: www.attorneydrafted.com).
However, the bottom line is that you should identify your "initial capital contribution" in your Operating Agreement (e.g., sweat equity, $ you deposited into LLC bank account, etc.) and the value thereof.
Thereafter, additional money you put into the LLC would normally be considered additional capital contributions (or loans to the LLC, which are a bit more complicated).
Once the LLC is up and running, make sure you pay for all LLC expenses from the LLC bank account (including a credit card used for business purposes), and have all revenue go into the LLC bank account. Also, make sure that you keep the LLC adequately capitalized to meet its obligations (e.g., retain profits/revenue in the LLC if you need the same to pay expenses).
Hope that helps! -- Best regards, Chris
Hi Chris, Thank you for the great video. Subscribed! I need an advice: I am a Private Pilot that is considering purchasing an aircraft. My aircraft will be used for traveling to client sites. Only fuel and hangar cost will be expensed. Since I am a Private Pilot only, I am not allowed to charge for my trips so, the aircraft will be used as a transportation means and not profit purposes. I was told I needed to have an LLC and have the aircraft under it. My question is: How an Operating Agreement for this type of LLC will look like? I know that the LLC will have only one employee (me) and it is not for profit... Thank you very much in advance. Keep up the great job you are doing.
Hi: Thank you for the kind words about the video. I can't give you specific legal advice without being retained, but I'll give you a couple things to consider (which should be confirmed by local counsel/CPA in your state).
1. I cannot give tax advice regarding income and expense related to your aircraft. If I understand correctly, you will not be generating any income from this aircraft, but the aircraft will incur some expenses which are tax deductions.
2. I'm not sure if these expenses will offset income generated by the LLC (e.g., you are a consultant that will bill your clients through an LLC), and this LLC will own an aircraft which generates fuel, hangar (and depreciation?) expenses?
3. In any event, I like the idea of having an LLC own an aircraft for liability and asset protection purposes. I have some videos which may help, including the Best State to Form an LLC and How to Form an LLC in certain states (right now I have WY, CA and DE ... Florida and TX about to launch). Also, What to Do after Forming an LLC.
4. I can't answer the Operating Agreement question without more information (and being retained), but it sounds like it will be a Single Member LLC. I prefer Manager-Managed LLCs (with you as the Manager). And, you want to form the LLC before you create the Operating Agreement so it can be name and state specific. In my view, WY is best for asset protection purposes, especially for Single Member LLCs.
Again, thank you for the compliment, and let me know if you have any other questions!
Best regards,
Chris
Hi, Mr. Jackson, I want to advice. I want to started the business in South Dakota, but your
business acumen is awesome. I want started before I watch your video. I want to your fee retainer. What do you charge for LLC in Wyoming? Thank you, Mr. Jackson. Warmest Regard, Robert Streetman
Hi Robert. Thank you for your kind words! Unfortunately, at this time, I'm not taking on new clients unless they are located in or doing business in CA. However, here is a link on how you can form your own LLC in WY: th-cam.com/video/Zl-CxK7L6Hg/w-d-xo.html. Let me know if you have any questions! Thank you.
Great video! Thanks for offering your expertise! Had a quick question. I have two Wyoming Single Member LLCs owned under my personal name. I wanted to create a new LLC taxed as a Partnership in a different state (NJ for example) to hold Title to a rental property. Is it perfectly legal to have my two WY LLCs to be the two partners of my NJ MMLLC? Is this a legal way to form a LLC taxed as a Partnership created and owned by a single human being?
Thanks for the kind words. I cannot give you tax advice, but multi-member LLCs are taxed as a partnership by default (unless you file Form 8832). I don't believe that, because you are the owner of the two members, it will make a difference (especially if each LLC has its own Tax ID-EIN). However, please run your proposed structure by a CPA to be sure you are choosing the best option for you tax-wise. On another note, yes, you can have your two WY LLCs be the two members of your NJ MMLLC. Great questions, and best of luck! Best regards, Chris
@@cjlawvideos Thank you! Its amazing the IRS allows a single person/individual to file a Partnership tax return for a particular entity simply by using two other entities that is owned by the same person/individual. I now understand how the rich stay rich. Your knowledge is powerful, thank you for sharing your power!
@@JtotheRizzo Once again, I appreciate the compliment. If you have a CPA, please check with him/her to confirm that this works and is the best structure for you as I cannot give tax advice. Good luck to you and go get 'em! Best regards, Chris
Hi Chris ! Many thanks for your video! After having the documents Operational agreement how do you send to the state? (In my case is New Mexico)
Hi Jane.
Thank you for the kind words. I'm glad you found the video helpful!
Note that the Operating Agreement is an internal document, so you don't submit it to the state. Generally speaking, the only time someone will ask for a copy of the Operating Agreement is (i) if it is necessary to open a bank account (usually not, but sometimes), (ii) if the LLC is taking out a loan (sometimes), (iii) if you are adding a new member and the potential member wants to see the Operating Agreement, or (iv) if your LLC is sued and the other side wants to see the Operating Agreement to determine whether you are abiding by it (in an effort to "pierce the veil" of the LLC if you are not or if you don't have one).
Hope that helps!
Best regards,
Chris
@@cjlawvideos amaizing ! Thank you very much !
@@janebond3263 You are welcome, and I wish you and your LLC all the best! -- Best regards, Chris
Thank you for the video but I have looked everywhere and still can not find an answer to my question. My spouse and I have a single member LLC in California but we have different last names how do I structure the operating agreement to be considered 1 owner with 100% ownership and not 2 with 50% each?
Thanks for watching and for your question. I cannot give legal advice without being retained or tax advice at any time, but please note the following. Since you and your spouse live in a community property state (CA) and have a CA LLC, you can be taxed as a single-member LLC if you so choose even if you are both members of the LLC. So, generally speaking, I suggest to my clients that they list both spouse's names on the Operating Agreement as 50/50 members. I do the same for my own LLCs. I suggest you check with your CPA as to the best tax election for your LLC (single-member sole proprietorship, multi-member partnership or S Corp). Hope that helps. Best regards, Chris
Thank you. Wouldn't the agreement be only stored internally, not notarized, or any means of making it official? So you can change it at your will, any time at any point to tailor if there is a legal challenge? What makes it official and be accepted?
Hi. Thanks for watching my video and for your question. Good question.
Yes, the Operating Agreement is essentially an internal document (until it is requested to be shown). You don't need to have it notarized unless you want to establish without a doubt when it was signed. With that said, it is not common or required to have an Operating Agreement notarized.
Although the Operating Agreement is primarily an internal document meant to govern how the LLC will operate, sometimes a bank will want to see it. Additionally, if the LLC is sued and the plaintiff wants to try to pierce the veil of the LLC to reach your personal assets, they will want to see whether the LLC has an Operating Agreement, and whether the LLC is following the rules and procedures set forth therein. If the answer to those two questions is no, then the plaintiff is more likely to prevail against the owner's personal assets.
While you could wait to draft your Operating Agreement until later, it is best to complete it as soon as you can after the LLC is formed. Why? Because you want to know what the rules and procedures are in the management of the LLC and abide by the same. Also, if the LLC is sued, the plaintiff may request sworn testimony as to when the Operating Agreement was signed.
I hope this helps, and I wish you and your LLC all the best. Let me know if you have any other questions, thanks.
Best regards,
Chris
what should I do after making the Operating Agreement should Fill it some were or just like this?
Hi. You can download it, sign it, then file it somewhere. It is an internal governance documents, so you don't need to disclose it to anyone unless it is requested (e.g., by a bank or title company). Just make sure you follow the rules and procedures set forth in the Operating Agreement. I wish you and your LLC all the best! Thank you. Best regards, Chris
How to add a beneficiary to my single member NY LLC. Do I list it in my operating agreement or do I make my trust own the LLC? Or do I leave it as I’m the only owner of LLC and then just list in my living trust later.
Hi. I can't give you legal advice as I'm not your attorney, but you can start with your Trust as the member if you'd like. Or, if you don't have a Trust yet, you can start as the individual member and later transfer your membership interest into your trust. That is done all the time, so no worries if you want to do it later. I hope this helps! Best regards, Chris
I don't understand how to fix the blanks in the dates left in the top of the operating agreement
What are we supposed to do with the operating agreement after printing it? Do we just save it, or do we need to file with the state???
Hi. Thanks for watching and for your question. Note that this is an internal document, so you do not have to file it with the state. You just need to save it, print it (and sign it), and follow any rules as set forth therein. Let me know if you have any other questions, thanks! Best regards, Chris
The video was very helpful but I didnt get the tax purpose section. As an amazon seller, amazon deducts taxes and submit it, so in this case do i have to pay any other tax as well? I have single member llc
Thank you for the kind words. I can't give tax advice, so I'll just provide some general comments. Regarding taxes, the sales tax paid by your customers on Amazon is different than the income tax you may owe from your business (if you have net profit/income). The tax purpose section is for income taxes. As a single member LLC, you will either be taxed as a sole proprietorship (default) or an S Corp (if you file Form 2553 and elect S Corp status). Hope that helps, and let me know if you have other questions. Thanks! Best regards, Chris
Hello Chris. I have a question. I added a new member to my single-member LLC in New Mexico, do I need a new EIN or I just fill the 8832 form to be taxed as a partnership?
Hi. Thank you for watching my video and for your question. If your LLC has its own EIN (i.e., it's not your SSN), then you don't need a new one. I cannot give tax advice, but if your LLC has not elected any particular tax status, then the default for a single member LLC is to be taxed as a sole-proprietorship. Once you add a partner, then it will be taxed as a partnership by default. However, it is probably a good idea to file Form 8832 if you choose to be taxed as a partnership. With that said, if you have already elected S-Corp tax status for the LLC, that will not change when you add a new member (unless you do something to cancel that status, like add a foreigner or a corporation as a member). I hope that helps, but I encourage you to discuss with your CPA the best tax election for your particular business purpose! Best regards, Chris
Hello Chris, did you already do a operating agreement template for Delaware and if so could you please leave the link for that video so I can access it?
Hi Chris. I don't have a video on how to create a free DE Operating Agreement yet, but thank you for that suggestion. I believe many of the same concepts will apply if you choose DE rather than CA.
On another note, a related company of mine is about to launch a legal template service providing attorney-quality templates (including Operating Agreements) at a fraction of what you'd pay an attorney. They are not state specific, but they are meant to appeal to someone who wants a very comprehensive Operating Agreement without incurring the time and expense associated with an attorney drafting an Operating Agreement specific to their situation. With that said, they are not a substitute for local and specific legal advice. The Operating Agreement templates are done, but we're in the process of adding an instructional video on how fill in the blanks along with other explanations. To get a discount, you can sign up in the pre-launch phase here: www.attorneydrafted.com. Thanks! Best regards, Chris
Can you share information or a template for a Multimember LLC OA meeting the requirements for SBA SDVOSB?
Hi. Thanks for watching and for your question. I was frankly not familiar with the requirements of a SDVOSB until after you asked me about it. As such, I don't have a template for that type of LLC. However, here is an article I found which may be of some help to you: smallgovcon.com/service-disabled-veteran-owned-small-businesses/oha-provisions-in-operating-agreements-for-sba-set-aside-program-participants-can-sink-eligibility/. Sorry I cannot help you beyond that, but I will look into adding this to my content down the road. Best regards, Chris
What do I do after I get my OPERATING agreement do I send it to anyone or it’s really just for me to keep just incase
Hi. Thanks for watching my video. The Operating Agreement is generally an internal document. However, your bank might request a copy when you open a bank account. Also, if the LLC is ever sued, you will likely need to produce the Operating Agreement. Of course, if you have other members they will need to be added to the Operating Agreement as members and be provided a copy of the Operating Agreement.
It is best to print it out and sign and date it as soon as possible after forming your LLC. And, then make sure that you follow the rules and procedures of the Operating Agreement. For more information on what to do after forming your LLC, here is a video that lays out the next steps: th-cam.com/video/QvFuTI3CdbQ/w-d-xo.html
I wish you the best for your LLC and business!
Best regards,
Chris
where can I add a beneficiary to a single member llc? If I own a property under an LLC, would adding a beneficiary avoid probate?
Hi. I can't give you legal advice without being retained, but you should discuss with your estate planning counsel or CPA putting your membership interest in the LLC (like other assets) in a trust. In other words, ultimately you have the trust as the LLC member, and you sign on behalf of the trust as the trustee. If you don't have a trust yet, note that you can contribute the membership interest to a trust later.
Hope this helps.
Best regards,
Chris
Can I use this for Florida? 😊
Thank you for watching and for your question. Yes, just choose Florida on the second page of the process. It will be very similar to the CA walkthrough. Best regards, Chris
Hi Chris, I don't understand why would I need to use my credit card to receive a free document. Can you please explain.
Hi. Thanks for watching and for your question. You have to provide a credit card to get the "free trial," and so long as you download your Operating Agreement and cancel your subscription within 7 days they won't charge you. I agree that it is a pain to provide your cc, but just make sure you cancel before the free trial period ends! Hope that helps, thanks! Best regards, Chris
Hello I have a concern, I am not sure if the deadline for MMLLC passed. Its a multimember LLC (no US residents, no starting working yet, no profits). Originally it was a LLC single member. I am afraid that I may have penalty. I didnt sent the 8832 form to IRS when I added a new member (only the amended articles of organization to state). May I still sending my TAX Report as a single member to avoid penalty if the deadline was march 15th?
what could be the penalty if I dont send before the deadline?
Hi. I'm sorry, but I cannot give tax advice. If you'd like a CPA, I can refer you to the one I use (as do many of my clients). If so, please reach out to me via my website at www.chrisjacksonlaw.com. Thank you.
@@cjlawvideos many thanks !!!
@@janebond3263 You're welcome, and best of luck to you and your LLC! Best regards, Chris
Hey! Is this a template which works only for multi-member LLCs or would it work for a single-member LLC as well?
Is there anything fundamentally different about an operating agreement for a single-member LLC from a multi-member LLC?
Hi. Thanks for watching and for your question. It is supposed to work for either single or multi-member LLCs. Please let me know if you have an issue there. Also, note that a related company of mine is about to launch the sale of attorney-quality templates at a fraction of what you'd pay an attorney (both single-member and multi-member). You can sign up for a discount here: www.attorneydrafted.com
Other than identifying the members, there isn't much of a difference in the Operating Agreement if the LLC will be manager-managed (which is what I recommend). If member-managed, then all members must make all decisions (which is one of the reasons I prefer manager-managed LLCs). Best regards, Chris
What do I do with the operating agreement? I live in Texas, this is an optional document, but how do I make it legally binding?
Hi: Thanks for watching my video and your question. I can't give you legal advice without being retained, but the Law Depot Operating Agreement should be compliant for a Texas LLC. Generally speaking, you just need to print it out and sign it for it to be legally binding. It is an internal document, and you usually don't need to present it to third parties (other than banks or perhaps a plaintiff in a lawsuit should you get sued). Just make sure you follow the guidelines set forth in the Operating Agreement. For other steps to take after you form your LLC, here is a link to that video: th-cam.com/video/QvFuTI3CdbQ/w-d-xo.html
Hope that helped, and I wish you and your LLC all the best.
Best regards,
Chris
@@cjlawvideos Thank you!
@@paid1nfull346 You are welcome, and go get 'em!
Where do i include the information about registered agent service?
Hi. Thank you for watching and for your question. Note that, while you can include in your Operating Agreement the name of your initial registered agent for service of process, it is generally not required that this be included in an Operating Agreement. I see that you do not get a question about the registered agent during the process of creating the Operating Agreement, and that's ok, as it is not required. Hope this helps, but if you have other questions, please let me know! Thank you. Best regards, Chris
What about the new Laws coming 2024? Will we even need LLC…I think this video will be needed with or w/o new laws
We’re going to have to release ALL operating owners full information; government name, address (not P.O. Box or registered agent) and much much more
Hi Raymond. Great question. Note that the Corporate Transparency Act requires (with exceptions) disclosure to the Treasury Department. This information will not be disclosed to the general public. It is meant to help law enforcement uncover drug trafficking, money laundering, and other crimes.
@@cjlawvideos you are absolutely correct…no money laundering…Got it…LOL
What about non pro rata distributions?
Hi. Thanks for watching and thanks for your question. The place to address non-pro rata distributions would be to select "Yes" under Membership Classes -Will this company have more than one class of members? That's where you can choose different voting rights or profit distribution rights. It is the first question in the "Membership" section.
Hope that helps!
Best regards,
Chris
As far as the membership classes go, I want to have superior voting power over all other future members I would potentially bring on? Am I still ok to select no on the membership class?
Hi. You can always amend your Operating Agreement later if you prefer not to put in the separate classes now.
However, if you prefer not to pay extra to LawDepot to have the ability to amend the Operating Agreement, then you should probably go ahead and add the class with the super voting power now. I hope that helps, but if you have any other questions, let me know. Thanks! Best regards, Chris
@@cjlawvideos Appreciate it. I am going to structure it in the following manner.
Class A: Complete Voting Rights and Complete Economic Rights
Class B: Partial Voting Rights and Complete Economic Rights
Class C: No Voting Rights and Complete Economic Rights
Do you think this would be a viable structure?
Hi. I think that approach is great. I'm thinking it would be structured something like this to accomplish your goals (FYI ... this is not legal advice):
Class A: Each unit or percentage owned has 10 votes (or 5). This way the founders stay in control and can give up more Class B units while retaining voting control.
Class B: Each unit or percentage owned has 1 vote
Class C: No voting rights.
You are thinking along the right lines ... great job, and I wish you all the best!
Best regards,
Chris
@@cjlawvideos ok last question, as far as point 11 goes “no member will have priority over any other member for the distribution of net profits or losses”
I don’t want to have forced distributions in my clause. Does this suggest so?
Is there a change I can make to this?
Thanks and I understand this is not legal advice.
@@cjlawvideos for example I’ve heard a pro-rata distribution can take away the flexibility management may need to act in the business best interest
Well, now I’m confused. I thought that I needed to have an operating agreement, business plan and business address in order to file my LLC with my state.
This sounds like I need my LLC filed a business address and even a business bank account with a certain amount of money already laid down.
Hi. Yes, normally you want to form your LLC before drafting your Operating Agreement. Your Operating Agreement will have the LLC formation date, name and sometimes the address.
The first step is usually to form your LLC. My TH-cam Channel has a couple of videos on how to form one on your own (See: www.youtube.com/@cjlawvideos). It includes one for WY and one for CA. I'm in the process of making one for Delaware.
With that said, you may want to decide on the address first since you may have to use that address in the setup process depending upon your state (assuming you don't have an office address or don't want to use your home address). For virtual offices, I personally use Alliance (note that this is an affiliate link which costs nothing extra to you, but helps support my channel): bit.ly/AllianceVirtualOffices.
For other next steps after forming your LLC, here is my "Next Steps" video. (Note that you need to form your LLC before opening a bank account.). Here is the video: th-cam.com/video/QvFuTI3CdbQ/w-d-xo.html
Hope this helps! Best of luck to you.
Best regards,
Chris
@@cjlawvideos That helps alot 👍 Thank you.
@@bluewater454 You are welcome, and best of luck!
How do you add authorized person? Is this the same
Thank you for watching and for your question. Do you mean how do you add a person authorized to sign documents on behalf of the LLC? If so, I recommend making it manager-managed and naming the manager. Let me know if I misunderstood your question, thanks! Best regards, Chris
Operating Agreement for a corporation
Hi. Corporations have something similar to an Operating Agreement. Corporations use "Bylaws." Thank you for the idea ... I will make a video on how to create corporate Bylaws for free. Thanks! Best regards, Chris
hi jack
Jax sends his regards, thanks!
How about a non profit LLC ?
Hi Pamela. I'm not an expert on non-profit entities, but my understanding is that most non-profits are formed as corporations (though some are formed as LLCs). The corporation's Bylaws are the equivalent of an Operating Agreement for an LLC. I checked on Law Depot, and when you create the Bylaws, you can select "Non-Profit" as Step 1.
Non-profits are very heavily regulated, so you may want to consult a CPA about what type of non-profit to form, and what type of entity to use, before you start. For example, will it be a "private foundation" that has limitations on who can donate, or will it be a "public charity?" Your CPA can advise you what's best depending upon your goals.
I may delve into this a bit more deeply and address in future videos, but for now you should seek the advice from someone who is very experienced in this field. I wish you all the best, and keep me posted if you can. Thank you! Best regards, Chris
Do I need file it or just keep it?
Thanks for watching and for your question. The Operating Agreement is an internal document so you should just keep it and operate the LLC according to its rules. Best of luck! Best regards, Chris
@@cjlawvideos Thank you so much!
@@-intlspecialinvestigations948 You’re welcome!
I wasn’t asked to specify the date why is that ?
Thanks for watching and for your question. I just checked my video, and when I made it they asked for the date at time stamp 23:05 in my video. If they are no longer asking for the date, you should be able to add it at some other point or after you download. Please let me know, thanks! Best regards, Chris
Where is the template?
Operating agreement ?
Hi: If you are looking for an Operating Agreement template that I will be selling through a related company, please join this list here so I can notify when it's ready: attorneydrafted.com/legal-templates-sign-up/. Note that it will be a high quality attorney-drafted template for a fraction of the price you'd pay an attorney. I should be ready in the next 7-10 days. Thanks! Best regards, Chris
The Link isn’t working
@@zariachanell Hi. Thanks for the heads up, but I checked and it is working on my end. If you don't mind, can you let me know which link and what happens when you select the link? Thanks!
Hey , im from illinois , can i just pay you to make one for me .
Hi: Thanks for watching and for your question. I don't have operating agreements specific to Illinois , but a related company of mine is about to launch a legal template service providing attorney-quality templates (including Operating Agreements) at a fraction of what you'd pay an attorney. They are not state specific, but they are meant to appeal to someone who wants a very comprehensive Operating Agreement without incurring the time and expense associated with an attorney drafting an Operating Agreement specific to your situation. With that said, they are not a substitute for local and specific legal advice. The Operating Agreement templates are done, but we're in the process of adding an instructional video on how fill in the blanks along with other explanations. To get a discount, you can sign up in the pre-launch phase here: www.attorneydrafted.com. Thanks! Best regards, Chris
Good morning attorney Jackson
I am new to your channel, I have been listening to your videos.
I would like to have a consultation, I have questions in regards to operating agreements and more. I have send you my information via email.
Thank you
Hi: Thank you for your comment, and note that I just sent you an email. Best regards, Chris
The template is NOT FREE. Another bait video.
Hi Andrew. It is free if you order it and then cancel your subscription within the 1-week free trial period. I just checked to make sure that has not changed, and it has not. Please let me know what the issue is on your end, thanks!
Not free
Hi. I just checked to see whether something has changed, and it has not. It is free if you sign up for the free trial subscription and cancel within one-week. You only have to pay if you do not cancel. Hope this helps!