It is extremely important that every limited liability company (“LLC”) have an LLC Operating Agreement. The Agreement is the core document that is referred to when issues concerning the LLC need to be resolved. The LLC Operating Agreement is the most important document for your LLC and can save you a lot of time, money, and problems.
Even though the LLC Agreement is not required to be filed with any state agency, it is unwise to operate an LLC without an LLC Operating Agreement, even if you’re the sole owner of your LLC.
It is extremely 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 Agreement, the LLC can closely resemble a sole proprietorship, which does not limit your personal liability for business debts of the LLC. Without an LLC Agreement, the basic operation of the LLC would then be governed by state law, which may not be advantageous to the LLC, it members, or the business it conducts.
The majority of state LLC statutes, for example, have default rules that govern how certain important business decisions should be made, such as admitting new members and dissolving the LLC. Defaulting to state law for important LLC decisions could be a great danger to your business. If you do not want the state to tell you how to run your business, it is extremely crucial that you have a well drafted LLC Agreement.
Adam Bergman is the president and creator of http://www.MyLLCAgreement.com, the market’s leading online legal website that offers customized LLC Operating Agreements. Mr. Bergman has worked as a corporate and tax attorney at White & Case LLP, Dewey LeBoeuf LLP, and Thelen LLP, three of the most prominent corporate law firms in the United States where he advised thousands of entrepreneurs and business owners on a wide range of corporate and tax issues involving limited liability companies for the past seven years. Adam Bergman is recognized as a leading partnership tax expert and has lectured attorneys on the taxation of LLCs.