LegalZoom LLC Operating Agreement: Everything You Need to Know
If you are starting a limited liability company (LLC), you may want to consider creating an operating agreement. An operating agreement is a legal document that outlines the rules and regulations of your LLC, as well as its members` rights and responsibilities. It is not required by law, but having one can help you avoid conflicts among members and provide a clear outline of how your LLC operates.
LegalZoom is a popular online legal service provider that offers a customizable LLC operating agreement template. In this article, we will explore what this operating agreement entails and why it can be valuable to your LLC.
What is an Operating Agreement?
An operating agreement is a document that outlines how your LLC functions. It includes important information such as:
– Each member`s ownership percentage
– How profits and losses are shared among members
– How voting rights are distributed
– How the LLC is managed
– Rules for adding or removing members
– How disputes among members are resolved
Why is an Operating Agreement Important?
Having a written operating agreement can help prevent disputes among members by providing clear guidelines for running the LLC. It can also help you secure financing or enter into contracts, as lenders and partners often require an LLC to have an operating agreement.
In addition, an operating agreement can help protect the limited liability protections that your LLC provides. Without an operating agreement, your LLC may be viewed as a partnership, which can jeopardize the limited liability protection that comes with an LLC.
What Does the LegalZoom LLC Operating Agreement Include?
The LegalZoom LLC operating agreement template includes the following sections:
– LLC Purpose
– Formation
– Members
– Management
– Capital Contributions
– Allocations, Distributions, and Tax Matters
– Books, Records, and Reports
– Transfers of Interest
– Dissolution
– Miscellaneous
Each section includes detailed information about the specific topic, such as how contributions are made, how profits and losses are allocated, and how members can sell their interest in the LLC. The template also includes instructions for customizing the agreement to meet your specific needs.
How to Customize Your LegalZoom LLC Operating Agreement
When you purchase the LegalZoom LLC operating agreement, you will receive a customizable template that includes instructions for tailoring the agreement to your needs. You can add or remove sections and clauses based on your LLC`s needs and state laws.
It is important to note that an operating agreement is a legal document, and any changes should be made with the guidance of a legal professional.
Conclusion
In summary, a LegalZoom LLC operating agreement is a valuable document for any LLC. It provides clear guidelines for running the LLC, protects your limited liability status, and can help secure financing or partnerships. When purchasing the LegalZoom LLC operating agreement template, make sure to customize it to your specific needs with the guidance of a legal professional.