Simple Single Member Llc Operating Agreement

A single-member LLC (SMLLC), also known as a single-member LLC, is a limited liability company (LLC) with an owner (member). As a separate entity, a one-person LLC protects its owner`s assets from the company`s debts and obligations. A single-member LLC operating agreement or a single-member limited liability company operating agreement is a document by which a single person who is the sole member (i.e., the sole owner) of an LLC establishes operating rules and procedures for the company. Protecting your assets depends on two things: the LLC regulations of your state and the separation of you and your LLC with a single member. Your company agreement won`t change any of that, but it will prove useful for more mundane tasks like opening a bank account. While sole proprietorships and LLCs have a single owner and are great options for those looking to open a small business, they differ in several ways: A single-member LLC can lose its liability protection if the owner doesn`t maintain a true separation from the LLC. Translation: If you are a single LLC owner and you pay for all your personal information from the LLC`s checking account, open up to a judge who can say that you and the LLC are the same entity. Alternatively, a one-person LLC may choose to be taxed as a corporation by filing an entity classification election (Form 8832). If you form an LLC yourself, you might think you don`t need an operating agreement. However, it is highly recommended to create one for the following reasons: A one-person operating agreement for a limited liability company (LLC) is a document that is created when setting up a business and determines how the company is operated. This document must be prepared with the help of a lawyer.

Notarial confirmation – It is strongly recommended that an operating contract for a single member be signed by the sole owner in the presence of a notary to prove its authenticity and the date of its signature. Single Member LLC`s operating agreements are used to define the structure of your business, show the financial separation between you and your business, illustrate to investors how your business works, and protect your business from standard state laws. Even if you are the only member, you are still running a business and this will be useful in determining how your business will operate. Keep in mind that the laws that govern LLCs vary from state to state. Some states — such as California, Georgia, Florida, Utah, New York, Oregon, Colorado, and Kansas — offer minimal protection for single-member LLCs, while others offer abundant protection. When creating your one-person LLC, think carefully about the state in which you want to start your business. Your decision affects how your one-person LLC is handled. Creating an operating agreement for your SMLLC can force you to see your plans for your business through someone else`s eyes and make the necessary adjustments.

Having your plan in writing can serve as a reminder to stay on track when things get hectic. You could too! It won`t hurt. On the contrary, if you take some time to read our company agreement, you can make sure to consider the first steps (such as contributions) and possible options (such as dissolution). Your bank may want to see it, and it`s free, so you might as well have it. But please do yourself a favor and don`t pay a lot of money for a single LLC operating contract. The following definitions are important for understanding the operating agreements of an LLC with a single member: Below is an example of an operating agreement for a single-member LLC. Click the buttons below the document to view a full version of the agreement or download an empty template. Click on the LLC`s one-person operating model to enlarge and read specific clauses. Yes, an LLC with only one member can add members. However, this will make the company a multi-member LLC that requires a change in the operating agreement. An LLC operating agreement with a single member can also be called an LLC operating agreement with a single member. As there is only one signatory, it is recommended that the owner sign the operating contract in the presence of a notary to ensure that it is time-stamped and considered legally valid.

Triggering events: No one wants to think about their own death or bankruptcy, but when creating a SINGLE member LLC operating agreement, it is necessary. .