Free Operating Agreement Templates
What Is an Operating Agreement?
An Operating Agreement is a formal statement that outlines the roles of the limited liability company's management and its day-to-day and long-term strategy.
Alternate Names:
- LLC Operating Agreement;
- Partnership Operating Agreement.
The purpose of this document is to confirm the owners have limited liability and their assets and debts are separate from the business, outline the current and upcoming operations of the company, explain what to do in case the business owner passes away or is incapacitated so that they are unable to make crucial decisions for the business, and prepare a set of rules the entity will follow in accordance with its financial state to avoid complying with default regulations and laws enacted by the state.
Operating Agreement Template Types
- Limited Liability Company (LLC) Operating Agreement Template. You may use this generic document to describe how the business will be run whether you just founded your company or want to make significant changes to the existing agreement;
- Single-Member LLC Operating Agreement Template. If the LLC only has one owner, it is important to establish its status properly separating the personal assets of the individual from the entity assets and protecting the person in question from personal liability that may occur as a result of business activities;
- Multi-Member LLC Operating Agreement Template. Compose this document in case your LLC has no managers but two or more owners. It is even more important to agree upon the structure of the company and the regulations everyone must adhere to if several people vote on major decisions regarding the survival of the business.
Operating Agreement Templates by State
To offer protection to every member of the LLC and prevent the authorities or courts from making decisions on behalf of your company, you need internal documentation that will help you govern the business without unnecessary distractions including those that may come from the inside - if, for example, you have a conflict with other members. Every state has its own regulations when it comes to limited liability companies, so it is essential to check the local laws and compose a state-specific Operating Agreement that will be considered valid even in the most extreme circumstances. See the documents below to select an Operating Agreement appropriate for your location and situation.
Do I Need an Operating Agreement for My LLC?
While certain states require every limited liability to create and maintain an updated version of the basic LLC Operating Agreement, most states do not ask business owners to set out the hierarchy of the company in writing explaining how the entity will determine its policy and vote on the most important matters that impact the future of the organization. However, even if there is no legal requirement to write a document of this kind, you should consider the benefits of this agreement: you will need guidance regarding the choices your company makes and procedures to follow whenever there is a major disagreement between the members of the LLC and the management. There will be no need to submit an Operating Agreement with any local or state authorities; however, it may come in handy whenever you are negotiating with potential business partners or suppliers that might want to learn more about the way your business works.
What Does an Operating Agreement Look Like?
Usually, an LLC Operating Agreement template contains the following sections:
- Mission statement of the company. List the name of the business, its contact details, and the goals the entity is planning to pursue. Describe the business type you have chosen, indicate the categories of goods and services you are going to provide, and mention the jurisdiction you subject the organization to.
- Ownership of the LLC. Name the owners, outline the distribution of capital and shares, and prepare to deal with the sudden passing of the owner or the decision of several members to leave the business.
- Management of the entity. It is crucial to include several sentences that illustrate the hierarchy of the LLC and determine who answers to whom in your business. You may have to act quickly, so it is important to have a precise protocol in place.
- Meetings of the LLC owners and the voting process. It is required to know how the major decisions of the company will be made - include the amendment procedures for the Operating Agreement in question. Moreover, you have to describe the potential dissolution of the entity.
How to Create an Operating Agreement?
To establish the framework and the governing structure of the LLC, one or several members of the company need to prepare a simple Operating Agreement that will include the main information about the entity in question. You should consider working on this legal instrument before your first transaction or contact with a business partner to know the foundation you are standing on. It is recommended to request the presence of all the limited liability company members at the meeting that allows the business to draft and approve several documents that define the future of the company. Every person involved in making a decision of this magnitude will be allowed to vote on the definitive draft of the Operating Agreement template - as a rule, it is necessary to secure the majority of votes to document how the company is going to be run.
How Much Does an Operating Agreement Cost?
If you are making your first steps on the market or inheriting the business from a more experienced individual, you may need to consult a lawyer who will help you to create an Operating Agreement from scratch. Since this document is essential for any company, at a minimum, you should reach out to a lawyer that will review the document you prepare on your own. Depending on your location, the cost of the Operating Agreement may vary from $500 to $1.000. It will cost less if you compose the document yourself, and the lawyer spends some time pointing out the flaws in your writing - however, make sure to find out whether they bill their services using an hourly rate or ask for a flat fee.
How to Amend an Operating Agreement?
It is quite simple to change the terms and conditions the Operating Agreement contains. To modify the text of the document, you need to propose an amendment and ask the members of the limited liability company to express their opinion about your ideas and vote following the procedures established by the original agreement. If the majority of members vote in favor of the amendment, you are allowed to draft a resolution - every member must sign this document before it is added to the internal records of the business. Do not forget to amend other documents if necessary - for instance, if you add a new LLC member, you may need to change the articles of incorporation.
Haven't found the template you're looking for? Take a look at the related topics below:
Documents:
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This type of agreement is used in Alaska in order to document and lay out the regulations and normal day-to-day operations of your business.
This agreement is used in Arizona and should clearly lay out all of the information regarding the structure of a business and the daily business operations that occur.
Using this document in Arkansas, the personal assets of a business owner are distinguished from the assets that are related to the business.
Residents of California may use this type of template to outline all of the general daily procedures within a single-member managed business.
This agreement is used in Colorado to outline details about standard day-to-day business operations as well as to establish ownership and management within a company.
Residents of Connecticut may use this template to produce a detailed operational plan of their business, outlining all of the everyday functions.
This document is used in Delaware and contains all of the necessary information about the organizational structure of a business and any other relevant information relating to the business.
This is a form that is created by a business owner in the case that they are the sole owner of the business in the state of Florida.
This agreement is used in Georgis to outline details about standard day-to-day business operations as well as to establish ownership and management within a company.
This agreement is used in Hawaii to outline details about standard day-to-day business operations as well as to establish ownership and management within a company.
This document is needed in Idaho to record specifics about the organizational structure of the business, establish business ownership, and provide information about the management team.
This template is used in Illinois and provides a thorough explanation of a business, covering information from the ownership of the business to the standard everyday practices that are implemented within the company.
This agreement is used in Indiana in order to clearly set in writing the policies, rules, structures, and ownership of the company in great detail.
This document is used in Iowa and the purpose is to clearly lay out the aims, ownership and management, regulations, and structure of the company as a whole.
This agreement is used in Kansas to outline details about standard day-to-day business operations as well as to establish ownership and management within a company.
This is a legal document used in Kentucky in which a single-member (owner) of a company describes the specific details of their business.
This type of agreement is designed for sole business owners that have their business registered in Louisiana.
In the state of Maine, this type of agreement is considered a legally necessary document that needs to be submitted to the state in order to function as a business with only one owner.
This agreement is used in Maryland to outline details about standard day-to-day business operations as well as to establish ownership and management within a company.
This agreement is used in Massachusetts to outline details about standard day-to-day business operations as well as to establish ownership and management within a company.
This type of agreement is used in Michigan to establish the rules and regulations within the company, set out the roles and responsibilities of other staff, as well as provide information about the management team and ownership details.
The main purpose of this agreement is to describe in detail all of the standard operating procedures within a business as well as information regarding the managing members and their responsibilities in the state of Minnesota.
Residents of Mississippi may use this template to outline all of the policies of a company together with the standard operating procedures.
This agreement is used in Missouri to outline details about standard day-to-day business operations as well as to establish ownership and management within a company.
This agreement is used in Montana to outline details about standard day-to-day business operations as well as to establish ownership and management within a company.
This document is used in Nebraska and outlines the day-to-day procedures and organizational structure of the business, outlining ownership rights and other crucial information about how the business is managed.
This is a form which documents and records all the crucial elements of a single-member business in the state of Nevada.
This document is used in New Hampshire and will contain details about the internal workings of a company.
This type of agreement is used in New Jersey and will contain information about the owner and their duties and responsibilities within a business.
Residents of New Mexico may use this type of template when a single member of a company wants to establish the specific operating procedures and structure of a business in written form.
This document is used in New York and clearly defines the ownership of a company, the management team and their roles, the organizational structure of the business, etc.
Residents of North Carolina may use this template to help differentiate belongings between those that belong to a business owner personally and those that belong to the business.
This document is used in North Dakota by the only legal business owner, describing the structure of the business and their ownership rights.
This type of agreement is used in Ohio in order to document and lay out the regulations and normal day-to-day operations of your business.
This template is used in Oklahoma to specify the standard operational practices within a company as well as the structure of the organization, the management team, and their specific roles and information regarding ownership.
This template is used in Oregon and composed by the sole owner of a company which will define the structure of the business, the specific rules and policies that are in place, the team of leaders within the company and their responsibilities, and other important information.
This type of agreement is used in Pennsylvania in order to document and lay out the regulations and normal day-to-day operations of your business.
This form is used in Rhode Island and contains all of the necessary information regarding the practices of the business, mainly concerning the organizational structure and policies.
This type of agreement is used in South Carolina in order to document and lay out the regulations and normal day-to-day operations of your business.
This form is used n South Dakota by the only owner of a company with the intention of establishing and recording specific information regarding the structure, standard procedures, roles, and responsibilities of individuals involved in the business as well as information concerning the owner.
