Are you ready to start your new business venture? Perhaps you live in one of the five states (California, New York, Maine, Delaware and Missouri) that require you to file an operating agreement if you intend to form a Limited Liability Corporation (LLC).
Or perhaps you're discerning enough to know that a controlling legal structure will benefit your business, even if you live in one of the forty-five states where such an agreement is optional and where articles of incorporation are the norm.
Now, you may be wondering what all has to be included in your operating agreement.
While the exact requirements will vary from state to state, there's a basic outline for both structure and terminology and that will be similar nationwide. That structure can best be understood by reviewing how we've broken it down below.
An operating agreement should include the following information:
While no state requires an LLC to file their bylaws or operating agreement with the Secretary of State office, there are five states that do require you to create them and keep them with your business records. These states are:
|States Requiring LLC Operating Agreements|
|California||California LLCs are required to have either an oral or written operating agreement. If written, the agreement must be stored with the company's records.|
|New York||New York LLCs must have a written operating agreement, which includes provisions relating to the business of the LLC, the conduct of its affairs, and the rights, preferences, limitations, or responsibilities of its members.|
|Maine||Maine LLCs must create an operating agreement before, after, or during the time of filing for an LLC. This agreement can be written, oral, or even implied. Clearly, it's a fairly lenient law, but still technically a requirement in Maine.|
|Delaware||Delaware LLCs must create an operating agreement before, after, or during the time of filing for an LLC. Like Maine, this agreement can be written, oral, or even implied.|
|Missouri||Missouri LLCs (like New York) must create either an oral or written operating agreement. The document should cover the conduct of the business, the affairs of the LLC, and the rights, powers, and duties of its members, managers, agents, or employees.|
We have addressed, in a very general way, some of the most important things an LLC operating agreement should include. Your attorney and accountant should be able to help you create one that covers all of the bases and ensures the best possible results for you and any other owners. Investing the time and resources required to create an LLC operating agreement designed to meet your specific needs will pay big dividends for years to come.
Ready to start your operating agreement? Form an LLC Online now.