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How to Write an LLC Operating Agreement Print E-mail
An LLC is a Limited Liability Company, ideal for start-ups and smaller businesses because the owner(s) take on limited liability (hence the name) for the company. Forming an LLC is an inexpensive and fairly simple process. The Operating Agreement is what governs the operations of your LLC.

1 Gather your basic information: the name of your company, where your company will locate and the names of Member(s) of the company and their physical address(es). Make note of your Agent's name.

2 Gather your financial information: what will the initial contribution of each member be and what percent of the company will each Member own. This can be simple: you, the Member, make an initial contribution of $10.00 and you hold 100% interest in the Company. You can have a single-member LLC or a multi-member LLC; what is important is that all members be included on the Operating Agreement.

3 Download a Sample LLC Operating Agreement. (See Additional Resources). Yes, you can write your own, but it is much smarter and simpler to make use of the many samples available. Operating Agreements are not complex, but the language is very "governmental" and you want to be sure it is interpreted correctly.

4 Determine if you need a Registered Agent. Every state's LLC laws are slightly different; on the Operating Agreement, you will see a blank to fill in for the Agent or Registered Agent. In many cases, this can simply be you, the Member. Check your state's LLC requirements and find out. (See Additional Resources).

5 Check that the Sample Agreement includes the following statement under the heading "Business Purpose": "Purpose of the Company is to engage in any lawful act or activity for which a Limited Liability Company may be formed under the Limited Liability Statutes of the State of_________________."

6 Check the language on the Sample Agreement under the heading "Term": it is most common to put "indefinitely" for the term, and "by a majority of the membership interest" for terms of dissolution.

7 Check the language on the Sample Agreement under the heading Management of the Business. Most small businesses
•are member-managed, but you may want to organize the LLC as managed by managers if there are many members and/or if some members are active and some are passive. Be sure the agreement you are using has the appropriate language for how you want your organization to work.

•8 Insert your own information into the Sample Agreement.using your notes from Steps 1 and 2. Be sure to include the appropriate number of signature lines.

•9 Print the Operating Agreement and print a typed list of the Members' names and addresses; attach the two together.

•10
Have the Members sign the Operating Agreement; copy it and provide a copy to each member. Keep the original copy in a safe place, and keep additional copies on hand in your files.

 

 

 
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