Texas Operating/Management Agreement for single member LLC

[Matt Boerlage]

Dear all, 

I would like to create a Single Member LLC to hold a long term rental property in Texas (I am living is Texas). Texas has no requirement for an operating agreement, but I would like to have one as I hear the general consensus is that (if done right) will help with liability protection.

My long term rental will then be owned by this Single Member LLC. I would like to do the state filing myself, because its easy and cheap. So I wonder if there is a "canned" operating agreement that I could use for this type of purpose. A CPA or Attorney have operating agreements available as well, typically for 500$ to 1200$. Of course your/my mileage may vary - but this seems such a standard thing to do, I can not imagine it's worth thousand dollars of contract rocket science.

Are there others that use Single Member LLCs for their Long term holds? How did you make an Operating Agreement or did you decide to call on an attorney?

thank you so much, 

Matt

[Stuart Udis]

@Matt Boerlage As a single member/disregarded entity, maintaining corporate formalities is important even though piercing the corporate veil is rare. Above all else, not having an operating agreement will be more crippling to your ability to operate your business.  Most banks will want to see an operating agreement in order to open an account.....I doubt a lender will agree to lend you money without an operating agreement.....Title companies will have a difficult time insuring title without one either. Where an attorney will add the most value in drafting an OA is in business planning. The proper language will make it far easier to admit members, sell membership interest and take a number of other actions that may be necessary in the future to advance your business objectives. As Ned shared, an attorney will also be able to explain the importance of the corporate formalities ensuring you operate your company properly.