What is an Operating Agreement and why do I need one for a single owner LLC?
An Operating Agreement is the document adopted by the owners of an LLC (called members) that governs the operation of the business. The type of issues addressed in an Operating Agreement include: identifying the owners and their percentage ownership interests, identifying the amount of money that each member is required to contribute to the LLC and creating the management structure for the LLC. A single member LLC that is not properly established is particularly susceptible to a claim of personal liability under the doctrine of Piercing the Veil,. Adopting an Operating Agreement for a single member LLC will maximize the LLC’s protection from personal liability.
