Why every Single Member LLC needs an Operating Agreement?
The LLC Operating Agreement is the core document that is referred to when issues concerning the limited liability company (“LLC”) need to be resolved. It is crucial that every LLC have an LLC Operating Agreement. The LLC Operating Agreement is not required to be filed with any state agency. Nevertheless, it is ill-advised to operate an LLC without an Operating Agreement, even if you’re the sole owner of your LLC. It is very important that you create an Operating Agreement to separate yourself as an individual from your LLC, even if you are the sole owner of your LLC. Without the formality of an Operating Agreement, the LLC could be viewed as a sole proprietorship, which does not limit your personal liability for the business debts of the LLC. Without an Operating Agreement, the basic operations of the LLC would then be governed by state law, which could negatively impact the LLC, its member, or the business it conducts.
