How To Draw Up an Operating Agreement

Standardized Legal Documents How To Draw Up an Operating Agreement

What Is an Operating Agreement and How To Write It?

An operating agreement is a document that frequently gets overlooked even though it’s of significant importance to all limited liability companies (LLC). If you’re thinking about forming an LLC, consider writing an operating agreement.

If drawing up legal documents isn’t your strong suit and you don’t know how to write a contract, DoNotPay has got your back. You don’t have to hire pricey lawyers or waste hours searching for the required contract template. We will take care of your operating agreement in no time!


What Is an Operating Agreement for an LLC?

An operating agreement is a legal document that LLCs use to:

  • Customize the LLC terms according to the owners’ needs
  • Define functional and financial decisions
  • Provide rules and guidelines according to which the LLC will operate

All members of the LLC are obligated to follow the rules defined by an operating agreement. Even if you decide to run a single-member LLC, your business can benefit from having an operating agreement.

The following states require LLC operating agreements:

  1. California
  2. Missouri
  3. Delaware
  4. New York
  5. Main

Why You Should Write an LLC Operating Agreement

While LLC operating agreements aren’t mandatory in most U.S. states, you should still write one. The agreement will give freedom, control, and protection to your business. Writing an LLC operating agreement enables you to:

  • Protect the limited liability status of your business—the operating agreement gives all members protection from personal liability
  • Clarify and write down verbal agreements—verbal agreements might cause misunderstanding. The operating agreement can help in case of a conflict
  • Protect your business in the eyes of the state your company is operating in—if you don’t draw up the agreement, you’ll have to follow the general rules of the state, which might not be right for your business

The Easiest Way To Draw Up an Operating Agreement Is With DoNotPay!

Since hiring a lawyer to draw up contracts is expensive, not every company can afford it. Operating agreements contain different information for every business, which means that there isn’t one universal template for everyone. The agreement has to be adjusted to your LLC’s needs to be effective.

DoNotPay developed a user-friendly feature that will help you create an operating agreement for your LLC in a snap. Based on the answers you give us, we will draw up a professional contract to fit your LLC needs. Here’s how you can create an agreement with us:

  1. Sign in to DoNotPay
  2. Type in Operating Agreement LLC in the Search field
  3. Respond to all of our questions 
  4. Sign or notarize the personalized document

Bear in mind that your operating agreement won’t be official until you and other LLC members sign it. We will help you draw up an LLC operating agreement in any state, including Maine, Missouri, and California.

How To Write an Operating Agreement for LLC Yourself

Writing an operating agreement on your own is far from easy. The agreement needs to cover a lot of issues and clauses that are crucial for your business. That’s why DoNotPay’s feature is the safest solution. If you still want to draw up an LLC operating agreement by yourself, these are some general sections and details you should include:

What To Include in an Operating Agreement   Description

Introduction Information

The introductory section of the agreement should include:

  • Name of the LLC (visit your state’s website to check the naming convention)
  • Articles of Organization info
  • Duration of the LLC
  • Address of the LLC’s principal office
  • Name and address of the individual who receives legal notices
  • Purpose of the business 

About Members, Interest, and Contributions

This is one of the most important sections. It should include the following info:

  • Initial members’ names
  • The contribution and ownership of each member
  • The process of admission
  • Allocation and distribution of taxes

LLC Management

You can choose between two options:

  1. Member-managed
  2. Hired manager 

Ending or Leaving the LLC

In this section, you should describe:

  • What happens when one of the members leaves the LLC
  • What happens when the LLC automatically ends
  • The process for ending the LLC

Liability Clause

You need to state that all LLC members have limited liability for their actions

Miscellaneous

This section is reserved for special agreements such as:

  • Non-compete agreement
  • Conflict of interest policy
  • Non-disclosure agreement

Recordkeeping

You can describe recordkeeping requirements according to the state’s rules

Make an Unlimited Number of Various Legal Documents in a Few Clicks 

DoNotPay is an easy and affordable option for anyone who wants to create operating agreements and other types of legal documents. These are some of the contracts and agreements you can draw up in a matter of minutes if you rely on DoNotPay:

Business Contracts Real Estate Other

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