Anybody have a template for an operating agreement for an LLC or care to share theirs with me?
I'm getting a loan through US Bank and they want to see operating agreements for my business LLC and the LLC that'll hold the buildings.
Informal: for a bank account...you'll need to format. Or email me and I'll share. This is not legal advice. Good luck!
Operating Agreement CY2016
- Formation- Name, LLC is registered in the state of STATE as a sole member for profit entity, effective DATE, as evident by STATE Secretary of State Certificate #999999.
- Overview- NAME, LLC currently operates a real estate division that is responsible for the acquisition of single and multifamily property for the purpose of rehab & resale, and buy & hold investing strategies. The entity is structured with the following divisions:
- Retail Sales & Acquisitions
- New Investor Sales & Acquisitions
- Professional Investor Sales & Acquisitions
- Internal Real Estate Investing
- Training, Coaching, Consulting, and Education
- Property Management
- Location- NAME, LLC. has a physical address at PO Box XX, CITY, STATE. ZIP.
- Purpose- NAME, LLC exists to ensure internal and external investors receive the maximum return on every real estate investment and receive the highest standard of customer service in the industry. This is achieved through analyzing and assembling deals through a series of proprietary steps that return maximum profit. Effectively, NAME, LLC is involved in buying and selling real estate.
- Staffing- STAFF, holding a real estate license in the state of STATE (#9999999), and occupying the position of VP Operations has discretionary and absolute decision making ability on behalf of the LLC.
- Taxes- NAME, LLC. complies with any and all necessary state and federal tax obligations and uses CPA Accountants in CITY, STATE for the preparation of all tax related documents.
- Banking- All funds of the LLC will be deposited in a separate bank account or in an account or accounts of a savings and loan association in the name of the LLC as determined by the VP of Operations.
@Jordan Moorhead why not just pay a local attorney a few hundred bucks to do it? Or, use legal zoom or similar service for even less. If you don't want to do that why not just take title in your personal name and skip the LLC?
If you don't have a decent operating agreement I doubt the LLC is worth anything in the way of legal protection anyway so why even use it?
Thanks @Brandon Sturgill !
No worries. It should do the trick to get your account established and you can always amend later...@Jordan Moorhead
How did this work out @Jordan Moorhead ?
Based on what I've researched, I think @Jeff Kehl made a prudent point -- the OA serves as an important document in case your LLC ever gets sued. Seems like it's worth the cost to get a solid OA in place if you're going down the LLC route, otherwise just forget the LLC, purchase in your name, and buy a bigger umbrella policy.
Brandon Sturgill Thanks I also was looking at operating agreement template for my LLC
Curious what he ended up doing.
Doing it yourself in the legal world is dangerous just like doing your own taxes if not a CPA or your own medical issues.
The Operating Agreement is the foundation, nuts and bolts of your LLC. Not having your Operating Agreement done correctly could be disastrous if ever sued or audited. It will generally be one of the first documents requested in discovery if sued.
The operating agreement is the most important document in your LLC. It memorializes the rules, rights, responsibilities and structures, the roles and framework of the business, your agreements and roles of your partners, and most importantly maintains your limited liability in the event of a lawsuit.
The operating agreement structures your working and financial relationships. For most investors, you started your LLC for protection and to limit your personal liability. Without your operating agreement properly in place, the LLC will then resemble a sole proprietorship from the courts, especially if your LLC is a single member, and your LLC's individual existence will not exist. The courts would pierce your veil. One way the LLC liability veil is pierced is by a lack of true separation between your LLC and you the owner. The true separation, and proof that your LLC is governed and run like a business, is the Operating Agreement.
If you have already decided to go the route of creating an LLC for your investments, then you must budget ALSO for the Operating Agreement. Otherwise the reason for creating your LLC in the first place is out the door, and you are still vulnerable.
@Brian Bradley Don't necessarily disagree...that's why I use an attorney...it's illegal for me as a licensed individual to write contracts/legal documents. The request was to get a business account opened at a bank...big difference in a formal OA and getting your account started and inserting your attorney approved OA once it's drafted.
Found this example:
Anyone has an operating agreement for Texas Series LLC?
@Jordan Moorhead Go ahead an pay an attorney to write one up. It's important to have it protect you if anything were to go wrong, and if your acquisitions are similar enough you possibly could make a boiler plate. Although, I would not recommend. What @Lee Rimpa said was ok, where you make it yourself and have an attorney review.
As a final thought, the more business you do with an attorney the more you can negotiate discounts with them. Not sure how many of these you are looking to do, but it's a thought.
Several folks and I are starting an LLC to begin our collaborative real estate investments. We will have an attorney finalize the operative agreement, but I was wondering if anyone could share the ones they used? We are intending to write a strong OA, and are hoping to read some that thought and expertise have gone into creating. In addition, hearing real world examples of how certain parts of an operating agreement did or, just as importantly, did NOT hold up in court.
Thank you in advance,
I know this is an old topic, but I thought I would provide a link that I found helpful in case someone comes across this thread.
They have many other free legal forms that you may want to check out :)