Resources for Writing a Business Operating Agreeament
Brad Smith • Oct 25, 2019
Congratulations! You’ve decided to structure your business as a limited liability corporation.
As an LLC owner, you are not personally liable for the debts of your business, and your financial risk is limited to the amount of your investment. Your taxes flow through to you instead of your organization, and you can participate in the management of your business. LLCs are suited toward many types of business ventures, except those of which prohibited by state statute.
Now that you’ve decided to organize as an LLC, you should consider drafting a business operating agreement.
What Is An Operating Agreement?
A business operating agreement “outlines the business' financial and functional decisions including rules, regulations and provisions,” according to the Small Business Administration. It covers the company’s members, managers, and employees.
The operating agreement is meant for internal purposes only and is not filed with any state or federal government agency.
What’s Included In An Operating Agreement?
The SBA and the State of Missouri say that a typical business operating agreement addresses:
- Whether the company is managed by members or managers
- The classes or groups of members and their rights and benefits
- Voting structure for company decisions, including percentage of members’ ownership
- Restrictions on transfer of membership interests
- Holding meetings
- Allocation of income and losses among the members
- Tax elections for the company
Is My Business Required To File An Operating Agreement?
Whether your business is required to draft an operating agreement depends on the state in which you organize.
In Missouri, state statute requires that all limited liability companies
have an operating agreement in addition to articles of organization.
In Illinois, however, no business operating agreement is required despite many mentions in state statute
as well as at least one guide from the Secretary of State. “It is unwise to operate without an operating agreement even though most states do not require a written document,” warns the SBA. “Regardless of your state's law, think twice before opting out of this provision.”
The SBA also mentions that the operating agreement should be kept with core business records and should remain confidential.
Because they cover a vast scope, we recommend seeking legal counsel in drafting the operating agreement for your new limited liability company. If you’re organizing in Illinois or Missouri, please contact us today to get started.
Interested in Working With Us?
If you need help with estate planning or any other legal concerns, we are here for you. Don't hesitate to contact our firm directly for assistance. Our dedicated team is ready to provide support and guidance to you and your loved ones during important life transitions.
Whether you're ready to schedule a strategy session to discuss your specific needs or if you're interested in exploring our wide range of complimentary guides and additional resources, we encourage you to get in touch with us.
With licensed attorneys and offices located in both Illinois and Missouri, we are well-equipped to serve clients in these regions. Reach out to us today and let us leverage our expertise and care to guide you through the legal process.
Helpful Guides
Begin your journey by taking advantage of our collection of complimentary guides.
Online Documents
Simple & Convenient, Cost Effective, Attorney Reviewed Documents.
Recent Posts
As we journey through life, one inevitable truth is the process of aging. In the United States, this reality brings about a myriad of legal considerations and challenges, prompting individuals and families to seek guidance in the realm of elder law. From estate planning to long-term care, understanding the intricacies of elder law can greatly ease the burden of navigating the complexities of aging. In this blog, we explore some frequently asked questions about elder law and delve into the landscape of aging in America.
As we journey through life, one inevitable truth is the process of aging. In the United States, this reality brings about a myriad of legal considerations and challenges, prompting individuals and families to seek guidance in the realm of elder law. From estate planning to long-term care, understanding the intricacies of elder law can greatly ease the burden of navigating the complexities of aging. In this blog, we explore some frequently asked questions about elder law and delve into the landscape of aging in America.
Many people overlook the importance of ongoing estate planning, assuming a will or trust is adequate. However, this passive approach can bring costly consequences for both finances and family in the future.
Are you feeling overwhelmed by the complexities of Medicaid in Illinois and Missouri? You're not alone. Many people find themselves in a maze of regulations, paperwork, and confusing terminology when trying to access this vital healthcare program. In this blog post, we'll break down some of the key aspects of Medicaid and discuss why seeking help is essential for ensuring you get the benefits you deserve.
When it comes to estate planning, delaying action can have far-reaching consequences that extend well beyond our lifetimes.
If you don't have a plan in place for your assets, the state will step in to decide how they are distributed. While some may trust the state's judgment, it's important to recognize that it doesn't understand your individual circumstances, and the process can be both time-consuming and expensive.
Click HERE To View April Newsletter
Submit Your Confidential Request
Click the button & fill out the form so we can better understand how we can help.