LLCs Operating Agreement is it Necessary?
When discussing an LLC with someone I am always asked, “What is an Operating Agreement”? and “why do I need one”? “I thought that by opening an LLC, I would avoid all the formal paperwork”.”I thought it was supposed to be uncomplicated, different from a corporation”. The answers to those questions are very simple. In the majority of states you don’t need an Operating Agreement. You are only required to file the Articles of Organization, List of Managers and or Members, and you do have to issue certificates of Ownership or Membership to the members. In some states in order to open a bank account under the business name you need to show an Operating Agreement. There are a few states where it is a requirement, and I might add for a very good reason. My personal feeling, honestly, I would not open an LLC without one. Even if it was a single member LLC. A properly written Operating Agreement simply stated will eliminate any confusion that can occur within the business for the manager/member
