This Operating Agreement is used in the formation of any Limited Liability Company. You make changes to fit your needs and add description of your business. Approximately 10 pages. It allows for eventual adding of new Members to LLC.
An LLC (Limited Liability Company) operating agreement is a legal document that outlines the internal operations, management structure, and ownership of an LLC. In Utah, like in many other states, LLC operating agreements are not required by law, but they are highly recommended for any LLC to ensure clear communication and avoid potential conflicts among members. The LLC operating agreement follows a specific format designed to meet the requirements of the state of Utah. It typically consists of several key sections tailored to cover various aspects of the LLC's operation. Let's explore these sections and the information they should include: 1. Name and Formation: This section should state the full legal name of the LLC, indicate that it is formed under Utah state laws, and provide the date of formation. 2. Purpose: The purpose section outlines the primary activities or goals for which the LLC is established. 3. Principal Office: It specifies the physical address where the LLC's main office or principal place of business is located in Utah. 4. Registered Agent: It identifies the individual or entity responsible for receiving legal documents and official correspondences on behalf of the LLC. The agent's name and address must be included. 5. Management Structure: Depending on the chosen management structure, the operating agreement may designate the LLC as either member-managed or manager-managed. In a member-managed LLC, all members directly participate in decision-making. In a manager-managed LLC, a designated manager handles the day-to-day operations and decision-making. 6. Member Contributions: This section details the capital contributions made by each member and outlines the process for future contributions, if any. 7. Profit and Loss Allocation: It specifies how the profits and losses of the LLC will be distributed among members. This can be divided equally, based on each member's percentage of ownership, or through a different agreed-upon method. 8. Member Voting and Decision-Making: It outlines the voting rights of members, how decisions are made, and whether voting power is determined by ownership percentage, membership class, or other factors. 9. Dissolution: This section covers the circumstances under which the LLC may be dissolved, such as by unanimous member consent or by a specific event specified in the agreement. 10. Additional Provisions: Any additional provisions or clauses addressing specific needs of the LLC may be included in this section, such as restrictions on transferring membership interests, non-competition agreements, or dispute resolution mechanisms. Different variations of LLC operating agreements exist, depending on the unique needs of the LLC. Some common types include: 1. Single-Member LLC Operating Agreement: This format is specifically designed for LCS with only one member, who holds sole ownership and control. 2. Multi-Member LLC Operating Agreement: This type is used when an LLC has multiple members, each with their own ownership percentage and respective rights and responsibilities. 3. Series LLC Operating Agreement: A series LLC is an LLC that can establish separate "series" within itself, each with distinct assets, liabilities, and members. This format allows for greater flexibility but requires additional provisions to address the series structure. In conclusion, an LLC operating agreement in Utah outlines the rules and regulations governing the internal affairs of the LLC. It is crucial for LLC owners to create and maintain an operating agreement to establish clarity, protect their limited liability status, and maintain a smooth and efficient operation.