LLC Operating Agreements
Limited Liability Companies may operate with fewer formalities than corporations. Members (owners) of Limited Liability Companies are shielded from legal responsibility for the financial obligations of the company and of other members PROVIDED THAT they maintain and operate the company as a separate entity.
A simple Single Member LLC Operating Agreement identifies the primary business of the company and sets forth operating rules for forming, maintaining, and operating the company as a separate entity.
Multi-member Limited Liability Company Operating Agreements are necessarily substantially more complex. Their development is time consuming and expensive. Among other issues, multi-member agreements routinely address capitalization and contribution requirements, classes of membership, voting rules, management (by members, by managers, or hybrid), taxation, member roles, member rights and obligations, transfers of member interests, termination and dissolution, and the sale of the business to name a few.
At a minimum, operating as a separate entity means obtaining a tax identification number for the company, opening and maintaining a bank account in the name of the company, adequately capitalizing the business, and always keeping company funds separate from personal funds.
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