LLC Operating Agreement (template + instructions)
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- เผยแพร่เมื่อ 15 มิ.ย. 2016
- LLC Operating Agreement instructions. Follow along step-by-step as I complete an LLC Operating Agreement. Free PDF download you can use for your LLC.
Operating Agreement Download (Word Doc): www.llcuniversity.com/wp-cont...
Operating Agreement Download (PDF):
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Operating Agreement Download (Google Docs):
docs.google.com/document/d/1W...
Our website: www.llcuniversity.com
WHAT IS AN LLC OPERATING AGREEMENT?
An Operating Agreement is an agreement for the member(s) of your LLC that sets forth how the LLC will be managed both financially and operationally.
Your Operating Agreement also spells out how much of the LLC each member owns.
You can have 1 member who owns 100%, you can have 2 members with a 50/50 split, 60/40, 70/30 (anything really!), or you can have 3 or more members and you can split the ownership any way you’d like.
The LLC is a flexible business structure. There is no limit on the number of members you can have. And, there are no restrictions on how you split the ownership of the company.
OPERATING AGREEMENT IS AN “INTERNAL DOCUMENT"
Unlike your LLC Formation Documents, the Operating Agreement does not need to be mailed anywhere.
You do not need to mail it to the State.
You do not need to mail it to the IRS.
It is strictly an “internal document”.
This means that you will just keep a copy with your other business documents.
PURPOSE OF THE LLC OPERATING AGREEMENT
Again, the purpose of the Operating Agreement is to spell out who the member(s) are and what percentage of the LLC they own, also known as their “membership interest”.
It also defines how the LLC is managed, how taxes are paid, and how profits and losses are distributed amongst the member(s).
Remember, your LLC can be owned by one person (called a Single-Member LLC) or your LLC can be owned by 2 or more people (called a Multi-Member LLC).
WHAT YOU NEED FOR YOUR LLC OPERATING AGREEMENT
In order to complete your Operating Agreement, you will need some basic information.
• The formation date of your LLC.
• The name and address of the Registered Office and Registered Agent.
• The general business purpose of the LLC.
• Member(s) percentages of ownership.
• Names of the Members and their addresses.
Your final Operating Agreement is not “set in stone”. You can make changes as needed.
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-- MAKING CHANGES TO YOUR LLC OPERATING AGREEMENT --
One of the benefits of forming an LLC is the flexibility of managing your business.
The Operating Agreement is a working document that is meant to be fluid and allow for changes as your business grows.
If you want to make simple changes (such as a change of address for a member or changing your Registered Office or Registered Agent), you’ll need to revise the original Operating Agreement.
If, however, you need to make complex changes (for example one member purchases the interests of another member, or you decide to raise financing with investors), it is best to hire an attorney. Making changes like these can have negative legal and tax consequences if done incorrectly.
Once all changes are made, you’ll need to print the new Operating Agreement and have all of the members sign it.
It is best practice to keep a copy of all versions of your Operating Agreement so you have a history of the changes that were made.
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-- WHO NEEDS YOUR LLC OPERATING AGREEMENT? --
You may need to provide a copy of your Operating Agreement to:
• A lender if you are obtaining financing
• A title company if you are purchasing real estate
• Accounting and tax professionals for financial assistance
• Lawyers for legal advice
• Potential investors or partners who have an interest in your business
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-- OPERATING AGREEMENT PROTECTS YOUR ASSETS --
If you’re involved in a legal battle, the Court will likely ask for your LLC’s Operating Agreement.
Having one can help prove to the Court that you have a legitimate LLC and that you are running your business properly.
If the Courts were to find you running an LLC without an Operating Agreement, they may go after your personal assets.
[=================================]
-- DISCLAIMER --
This information is provided for educational purposes only and in no way constitutes legal, tax, or financial advice. For legal, tax, or financial advice specific to your business needs, we encourage you to consult with a licensed attorney and/or CPA in your state.
LLC University® is a registered trademark of LLCU Media Group, LLC.
© LLCU Media Group, LLC. All rights reserved.
www.llcuniversity.com
[=================================]
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Hey folks, make sure to check the site for most up-to-date information: www.llcuniversity.com/operating-agreement/. Or select your state and start forming your LLC with our free guides: www.llcuniversity.com/
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You saved me over $1000. I went to open a business account and operating agreement was one of the requirements. I am very fortunate to have come across your channel and may God bless your endevours as you continue to be of service to others.
That is so great to hear! Happy we could put the $1,000 back into your pocket for better use ;) Thank you for the kind words, and best wishes to you as well Nectarios!
Do we just keep a copy of it for ourselves or does it have to be registered somewhere ! In state or county or somewhere
@andrew-isac You keep the copy internally for yourself. In some cases a bank may ask for a copy when You're opening a business bank account but this document is internally to how your business is operated, how finances/shares are handled and who the members are.
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You're very welcome! Happy we could help. If you have any questions you are searching in google, just add "llc university" in your search. We have tons of helpful articles and instructions on our website too. Hope that helps.
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Hi Debra, you're very welcome :) I really appreciate you noticing and the kind words! Let me know if you run into any other questions.
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You're very welcome! Those long ones (while often comprehensive), can be quite overwhelming to go through and understand.
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You're very welcome! Feel free to stop by our site. We have a lot more resources there :) www.llcuniversity.com/learning-center/
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Just subscribed. I am in process of making an LLC operating agreement…
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@@llcuniversity hey I am a single member LLC, just formed a few days ago. For the contribution section, how much will I put for that? That is the only part I didn't get in this video. Thanks for the amazing info 🙏
@@DThornDigital - You can enter whatever you'd like. We recommend putting in enough to get your business started. We have more information here: www.llcuniversity.com/money/llc-capital-contributions/
Huge help, thanks so much!!
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Can I use this same template for a "Manager-Managed" LLC?
Apologies, this form is for member-managed LLCs. Check this link for a manager-managed LLC Operating Agreement: www.northwestregisteredagent.com/manager-managed-llc-operating-agreement.html
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Wow, that is impressive! Glad you got it sorted. We hope to have more content on our website in the future regarding LLC/IRAs. Would you be willing to email us the template you created? No worries if you'd rather not. Thanks.
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Thanks so much for all the helpful information! Question... Can someone select the "accrual" method of accounting instead of "cash?" If so, what are the benefits of using the "cash" method vs. "accrual" for accounting treatment?
You're welcome Eduard. Yes, you can certainly make any changes you need. The cash method is just more common in the context of small business owners. Too long of an answer to spell out here, but check out this video: th-cam.com/video/KcTZdXpaVOU/w-d-xo.html
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