Online Incorporation MaxBlog

It has been documented on this incorporation blog and in the Knowledge Center at MaxFilings that an operating agreement, while not required in many states, is necessary for even solely owned/operated limited liability companies.

Creating an operating agreement for a LLC can be more time-consuming than for a corporation since state laws governing an LLC are much more flexible. Many of the issues the operating agreement addresses are already detailed in law for corporations.

Therefore, it is important to know what should be included when meeting with your attorney to draft an operating agreement for your LLC. In general, an operating agreement needs to include ownership percentages, management, voting, allocation of profits/losses, distribution, members’ rights/responsibilities, ownership changes, and amendments/dissolution.

Be aware of the elements needed in any operating agreement when forming your LLC with MaxFilings online incorporation center. LLC Operating Agreement - What Should be Included? addresses the general elements needed for an LLC Operating Agreement.

Even though an operating agreement is not required for an LLC in all states, you might consider it necessary. Even for a solely owned LLC, the operating agreement helps solidify your limited liability status. For LLCs with multiple members, an operating agreement pre-addresses many issues that could arise, from management to money issues.

If you do not have an operating agreement and a dispute arises between two members of the company, default rules apply which are established by the state. And which do you think is better, operating under the rules you wrote - or those of the state? Any entrepreneur should read Is An Operating Agreement Necessary for an LLC? for a closer look at this important issue.