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Washington state doesn't legally require an LLC to adopt a written operating agreement. However, a written operating agreement is important for proving ownership and limited liability status. It can also help you resolve disputes.
An operating agreement is a key document used by LLCs because it outlines the business' financial and functional decisions including rules, regulations and provisions. The purpose of the document is to govern the internal operations of the business in a way that suits the specific needs of the business owners.
What should a multi-member operating agreement include? Affirms that the LLC has been formed by state laws and will conduct lawful business. Notes where key business information (such as member info and registered agent) can be found. Lists the events that can end the business (and how members can continue the LLC)
An operating agreement should include the following: Percentage of members' ownership. Meeting provisions and voting rights. Powers and duties of members and management. Distribution of profits and losses. Tax treatment preference. A liability statement. Management structure. Operating procedures.
Common pitfalls of a poorly drafted Operating Agreement include failing to: (i) specify what authority managers or members have; (ii) carve out key decisions that require a higher approval threshold (e.g., dissolution, sale of all or substantially all of the assets of the LLC, etc.); (iii) address how deadlocks in the ...
The state of Washington doesn't require an LLC operating agreement being filed, so there's no specific information, responsibilities, or authorities you must include in the document. However, we always recommend using one for your internal management.
We walk you through the process step-by-step: Name Your Washington State LLC. First, select a name for your Washington State LLC. ... Appoint a Registered Agent. ... File a Certificate of Formation. ... Prepare an Operating Agreement. ... Comply with WA LLC Tax and Regulatory Requirements.
Although most states do not require the creation of an operating agreement, it is nonetheless regarded as a critical document that should be included when forming a limited liability company. Once each member (owner) signs the document, it becomes a legally binding set of regulations that must be followed.