So, Why Create an LLC Operating Agreement?
For a solely owned LLC, which can sometimes be run in a way that makes it look more like a sole proprietorship, an operating agreement will help solidify the owner’s limited liability status – no doubt one of the prime reasons for forming an LLC in the first place. In multiple member LLC’s, an operating agreement can reduce or eliminate future misunderstandings and disputes among members by pre-addressing management and money issues. But most important, would you rather have your LLC governed by your rules, established by you and set forth in your operating agreement, or have it governed by “default rules” established by your state to cover things that are not set forth in an operating agreement? Setting your own rules in an LLC operating agreement wins the vote, hands down. But when it comes down to writing one, we may question the highly touted and generally agreed upon “simplicity and ease” of forming and operating an LLC. That may well be accurate down the road – but initially ther
