rongsheng llc free sample

A limited liability company (LLC) is a type of business structure that combines the benefits of a corporation with the tax benefits of a sole proprietorship or partnership. LLCs minimize the personal legal accountability of their members — especially in the event of litigation. It also protects the members’ personal assets from collection, creating a separate property from the LLC.

A business should have an LLC Operating Agreement to receive these benefits and protections. These agreements organize the LLC and set forth essential responsibilities and obligations. Legal Templates can help you create your free LLC Operating Agreement to get your business started correctly.

An LLC Operating Agreement is a critical legal document that outlines an LLC’s ownership and member duties. The agreement sets out the financial and working relations that suit the specific needs of the business owners. From daily operations to what would happen if a member needs to leave the business, an operating agreement is crucial to your company and should be created as soon as you form your LLC.

Most states do not specifically require an Operating Agreement to create an LLC. However, you are afforded fewer protections without one, and a court could find that your business is not a properly formed LLC. This could result in personal liability for the LLC’s members.

Individuals looking for more control over how their companies are operated day-to-day and managed on a long-term and strategic level should invest in an LLC Operating Agreement.

A written LLC Operating Agreement protects a company’s limited liability status by proving that the LLC is a separate legal entity. Without written documentation of an LLC Operating Agreement, a company may appear to be a sole proprietorship or partnership for tax and lawful purposes.

Banks, lenders, investors, and professionals will often ask for an LLC Operating Agreement before allowing a company to open a business checking account, secure financing, receive investment money, or obtain proper legal and tax help.

Your state’s default LLC rules will apply if you do not have an Operating Agreement. For example, suppose you do not detail what happens when a company member leaves or passes away. In that case, the state may automatically dissolve your limited liability company based on its laws.

If you want something different than your state’s de facto laws, an LLC Operating Agreement allows you to retain control and flexibility on how the company should operate. LLC members own a percentage of the company, not shares of a corporation. However, state default rules often assume that each owner has an equal share of the company, even though they may have contributed different amounts of money, property, or time.

Most joint ventures established in the US are formed as LLCs for tax purposes. [1] If you want to create your LLC as a joint venture, you might also need a joint venture agreement.

An LLC Operating Agreement should detail the name of each member of the LLC. It should include their legal name, not informal designations or “nicknames.” This legally identifies who is an owner of the LLC, so a proper legal assignment of the parties is essential.

The introductory provisions set forth important summary details of the LLC Operating Agreement. It includes the company’s name, principal place of business, and purpose. It will also include information on the company’s registered agent and that person’s address. This section should also include information on the following:

a) List the legal name that you will be operating and filing taxes under. This may or may not be the name you use for marketing or other purposes. However, this should be the name you used to legally file the LLC in your state. Be aware that states have specific requirements for how you name your LLC. This varies by state so be sure to check with your Secretary of State or the equivalent business formation office in your state for the naming requirements of your LLC.

b) List the legal name that you will be operating and filing taxes under. This may or may not be the name you use for marketing or other purposes. However, this should be the name you used to legally file the LLC in your state. Be aware that states have specific requirements for how you name your LLC. This varies by state so be sure to check with your Secretary of State or the equivalent business formation office in your state for the naming requirements of your LLC.

d) The registered agent is the designated individual or company physically located within the state who can receive service of process or other correspondence on behalf of the LLC. A member located in the state can be appointed to serve as a registered agent for the LLC. The registered office is the full physical address of the registered agent, where service of process or other legal or official correspondence can be delivered or served upon the company. This cannot be a PO Box.

f) This is the timeframe that the LLC will follow to establish a full year. Most businesses choose to follow the calendar year, which runs from January 1 through December 31; however, you can choose a different time frame as long as it is a full year. For example, your fiscal year can run from April 1 through March 31.

LLCs can structure ownership rights and voting rights together or separately. This depends on how you want voting rights to work within your new company.

b) If there is more than one class of membership units that will be issued then you can input the number of Class B units that the LLC may issue to its members here.

If the LLC is manager-managed, this section should detail which LLC member is the manager, the manager’s term, and how a manager is voted into their position. It should also outline the manager’s duties and their rights to enter into an agreement on behalf of the LLC. If applicable, it should also include any additional compensation for being a manager.

a) Manager-managed LLCs are granted authority to manage day-to-day operations but aren’t given all member authorities. If the members would rather take a passive investor role in the business, a manager-management structure is preferable. This structure may also be better if the members are not skilled in management, or if the LLC is large enough to the point where it’s no longer practical to have all members involved in every decision.

Capital contributions are the amount of property, services, or money that each member gives in the formation of the LLC and what they may be asked to give in the future. The LLC Operating Agreement should outline the members’ contributions and how they relate to their respective ownership interests. Certain agreements may grant ownership interests without a monetary capital contribution. When this is the case, the value of the member’s contribution should be clearly stated in the agreement.

Lastly, the section should include information on if and when the return of capital contributions may occur. Outlining this information now is key to properly forming your new LLC.

The LLC Operating Agreement should account for how net profits or net losses will be determined and how they will be distributed between the members. This is typically based on ownership percentage or different ownership brackets. An LLC Operating Agreement template provides you the flexibility to create an allocation scheme that fits your company’s needs. It will also discuss when distributions will be made and any prerequisite conditions necessary before distributions will occur.

This section outlines how and when the LLC will cease to operate. It outlines who decides to dissolve the LLC, voting rights, and any automatic dissolution conditions like death or bankruptcy. It will also detail the specific procedures for liquidating company assets, payment of obligations, and full accounting related to winding up the business. A well-drafted form agreement then outlines how remaining liabilities or assets are distributed to members of the LLC.

Indemnification sections also typically include insurance information. This section permits the LLC to purchase and maintain insurance for the company, its members, employees, and property.

This sample LLC Operating Agreement details an agreement between two members of the LLC. The two members, “Kenneth A Wenger” and “Hattie J Stamps,” agree on how the LLC will be run. Topics included are membership rights, allocation of profits and losses, what to do with salaries and expenses, and others.

With this free sample LLC Operating Agreement, you can build your operating agreement by filling in the blank sections. This template allows you to create an agreement that fits your company’s unique needs.

The purpose of an LLC is to protect the individual members from liability by protecting their assets. If the LLC is sued, the individual members and their assets should not be directly liable.

You can create your Operating Agreement for your LLC. Using a template form builder, you can quickly create an LLC Operating Agreement to create a binding legal document. While most states do not specifically require these agreements, they are an essential asset in protecting each member’s rights and the health of the LLC.

In most states, you do not have to have an LLC Operating Agreement at all. The LLC can still exist and still protects from individual liability. In the few states that do require Operating Agreements, it is typically required to form or maintain the entity and is used when a court scrutinizes how to treat the entity in a dispute or by the IRS in an audit. Certain states, like Delaware or New York, require an Operating Agreement.

Even for states that don’t require one, Operating Agreements are key evidence that an LLC is formed and the company is not a sole proprietorship or partnership in disguise. Without one, disputes between members will be subject to a state’s de facto LLC laws, which may not operate in your favor.

Yes, all members of an LLC have to sign the Operating Agreement. Members must sign the agreement to be bound to it. If a member doesn’t sign, they may not be legally obligated to follow the same rules as the rest. A dedicated section for each member’s signature is included in the above template.

An LLC agreement is the same as an LLC Operating Agreement, and they are often used as interchangeable terms. Some people, instead, say LLC agreement when referring to the Articles of Organization. The Articles of Organization are a separate but important part of forming the LLC with the state — making it a recognized legal entity.

Although you may not need a Business Plan, LLC Operating Agreements and Business Plans are important legal documents. There are some overlaps between the two documents, but they have different uses. A Business Plan lays out how a business will achieve its goals and objectives and is a useful internal document and vital for securing investment and funding. An LLC Operating Agreement, on the other hand, outlines how the business will be run, such as daily operations and member duties.

You can usually choose to form your company in any state; however, check your state laws and/or professional requirements to determine if the state you have chosen to form your business in or the specific type of business you are operating has a bona fide office requirement or other condition for doing business in the state that you have chosen. You do not need to make an LLC Operating Agreement for every state that you do business in.

An LLC operating agreement is a binding contract between the owners (members) of an LLC that governs how decisions are made, contributions, and the entity’s ownership.It is the only document that records each member’s ownership interest.

An operating agreement is generally written when an LLC is formed, and it is not filed with any government office (a copy is kept by each member). All members, no matter their ownership interest, are required to sign.

Governing contract adopted by members of a Limited Liability Company (LLC). It may be used to regulate nearly all aspects of the LLC’s affairs, including how the business is managed, how assets are used and how revenues are shared. An operating agreement will override any default rules presented by a state LLC statute, which controls in the absence of an operating agreement.

If a new member is added to the company, the LLC operating agreement must be amended with the written consent of all existing members. This also applies to increasing or decreasing ownership from one member to the next.

When setting up the structure of your LLC operating agreement, you can keep it simple or add as many laws within the company as you see fit. An LLC typically has much less paperwork and meeting requirements than most other formation types.

LLC members are not personally liable or responsible for business debts and liabilities. This particular benefit is why many people choose to create an LLC over other entity types.

iii.) Accounting. Accurate books and records of the LLC that includes providing necessary documents for the Members iv.) to file taxes in a timely manner;

f.) Indemnification. None of the Members shall bear the responsibility, obligations, or liabilities of the LLC or others who may act on the LLC’s behalf.

Over time, LLCs tend to go through common changes. Members leave or join. More capital is added. The business may changes its mind on a structural or operational issues—maybe opting to be manager-managed or requiring unanimous votes on certain decisions. In all of these cases, the LLC operating agreement should be updated to reflect the new situation, policy, or procedure. Although amendments are internal (they aren’t filed with any state agency), it’s important not to fall behind on these updates.

In the eyes of a court, if the operating agreement isn’t amended, it’s like the changes didn’t happen. It doesn’t matter if the agreement is at odds with actual practices. Imagine a member leaves the LLC and their interest is reassigned to other members—but the operating agreement is never updated. And then the business dissolves. On paper, that absent member is still due compensation. Yikes. So, it’s good practice to amend your operating agreement as needed.

Maintaining an LLC is a lot of work. In addition to free forms, we can do a lot more for your LLC. We provide registered agent service in every state for $125 a year. We also form LLCs for $100 plus state fees.

A Limited Liability Company (LLC) Operating Agreement, also known as an LLC Company Agreement, is a legal document that establishes the rights and responsibilities of each LLC member and provides details such as:

To be an LLC member, an individual or corporation provides capital contributions in exchange for a percentage of ownership interest in the company. Use LawDepot’s LLC Operating Agreement template to describe each member’s contributions to your company and their role in internal management.

If you form an LLC inDelaware,Maine,Missouri, orNew York, state laws require you to create an Operating Agreement(though you don’t need to file the document with the government). If your state does not require a written company agreement, you should keep in mind that this document is crucial to your company’s internal operations.

As such, multi-member LLCs can use this agreement to reduce the chances of disputes between members. Single-member LLCs may also benefit from an Operating Agreement, especially if the sole member relies on a manager to conduct company business.

Without an LLC Operating Agreement, any legal actions against your company will rely on the provisions established by your state’s LLC code.Creating a company agreement allows you to exert more control over the rules that govern your company’s management.

To protect the interests of individual members, a company may require unanimous consent for certain actions—especially when a business decision has a significant impact on the success of the LLC. For example, members may require unanimous consent on critical issues, such as:

Expansion of the LLC may require significant financial investment with a large debt load. To limit the risk to individual members, they may set a dollar amount for acceptable levels of liability. Any liability over that amount would require the consent of all members.

Your LLC’s tax classification affects how you file federal income tax for your business. Contact a tax lawyer or a qualified accountant for help deciding which tax system works best for your business.

The unified tax audit rules (facilitated by the IRS) automatically apply to any business entity that is taxed as a partnership. These rules do not apply to single-member LLCs or to those that elect to be taxed as corporations.

Generally, an LLC that has at least two members is treated as a partnership for tax purposes. In this case, the business does not pay income tax but does pay employment and excise taxes. Each partner reports their earnings from the LLC on their personal tax return.

A single-member LLC is treated as a disregarded entity (also known as a sole proprietorship). In this case, the owner reports the company’s income and expenses on their personal tax return. However, a single-member LLC can elect to be taxed as a corporation instead.

You can change the terms of an LLC Operating Agreement only if the changes are documented in writing and signed by all the members of the LLC. Use LawDepot’s Contract Addendum to make changes to your existing Operating Agreement.

Although a few states require LLC members to create an Operating Agreement, you don’t need to file this internal document with the government. Instead, states require you to file your company’s Articles of Organization and annual reports.

An LLC Operating Agreement may be used to outline the terms of a new LLC. The Operating Agreement typically includes a list of all Members to the agreement as well as their contribution amounts and ownership interest percentages. The Operating Agreement also establishes the general operating rules of the LLC, including how voting will work, buy-out provisions, and the management structure.

Most states require a general Statement of Purpose for LLCs being formed in their state. The statement can be very broad, such as "manufacturing" or "email marketing." Generally, though, it is best to be more specific in order to avoid any misunderstandings or legal complications later.

The LLC"s Primary Business Address is the primary location from where the LLC operates. Some states (Alaska, Arizona, Louisiana, Maryland, New Hampshire, and South Dakota) require that LLCs registered to their state have their primary business address within the state"s borders. Other states do not require that the office be located in their state, but require a Registered Agent or Registered Office within the state for service of process or other notifications.

When will your Operating Agreement take effect? This can be in the future or the past, but should be on or after the date when your LLC"s official paperwork is accepted and approved by the state.

Will the LLC operate indefinitely, or will it end on a specific date? You can choose for the LLC to continue until the Members dissolve it at a later date, or you can set a limited lifetime.

Most states require that LLCs and other companies doing business in their borders maintain either a registered office or a registered agent for the service of process or other notices. All states other than Pennsylvania require both, although some states, such as New York, allow their state"s Secretary of State to serve as the Registered Agent. Each of the 50 states may have their own particular definitions of these terms, but they mostly conform to the definitions below:

The partnership representative is the liaison between the LLC and the IRS in the event of an audit. The representative does not have to be a partner or officer in the LLC, but they must be a member with a substantial presence in the United States. The representative must be designated in the annual tax return. If one is not named, the IRS may select any member. The partnership and its partners are bound by actions taken by the partnership representative.

Members are the owners of the LLC and in most states they can be individuals, corporations, other LLCs or foreign entities, although these are often the founding individuals and contributors. Few states limit the number of members from single-member LLCs to having a high number of members.

Typically, when an LLC is formed, a Member makes a contribution to the LLC in the form of capital investment or funding. Members may also make "non-cash contributions," such as contributing assets (shares or other non-cash financial assets), real estate, personal property (equipment, supplies, decor, etc.), intellectual property, services, or just old fashioned “sweat equity” (time and effort). Members may even “contribute” the promise of future funding, services, or non-cash contributions.

Regardless of what is being contributed, you will need to list all the Member"s contributions to the LLC (whether they are cash contributions, non-cash contributions, or both) and place a monetary value on all non-cash contributions, including the appraised value of any real property.

Ownership is typically determined by the amount of capital contributions given to the LLC upon startup. You should use this section of the Agreement to define each Member"s percentage of ownership of the total LLC based on their contribution amount. The total of all percentages should equal 100%.

Costs and profit shares will be determined by the percentage of ownership. Although some states allow you to assign cost and profit shares that are different from the percent ownership, the Internal Revenue Service must approve of the change. If you wish to assign cost and profit shares different from the percent ownership, it is suggested that you consult a lawyer or accountant familiar with LLC and tax laws for your state.

This section specifies who will manage the LLC on a day-to-day basis: the members or managers. If the LLC will be manager-managed, you can appoint these managers in this section. You can also use this section to specify who will carry out which duties.

Member-Managed LLCs:An LLC may be managed by its Members or by a set of Managers, who may or may not also be Members. If an LLC is Member-Managed, all of the LLC"s Members have a managerial role in the company, and can vote on matters of governance. This may limit the ability of Members to act as silent partners or passive investors in the LLC.

Manager-Managed LLCs: If an LLC is Manager-Managed, then the day-to-day operations of the LLC are controlled by appointed Managers (who may or may not be Members). In a Manager-Managed LLC, the Members will still retain some power, such as appointing Managers or dissolving the company.

In a Member-Managed LLC, each Member may have the authority to bind the LLC, while in a Manager-Managed LLC, that authority is limited to the Managers or a designated officer (if the LLC has elected to appoint officers).

You may want your LLC to have officers, such as a President, Secretary or Treasurer. Assigning officers can be helpful in delegating authority and running the LLC. Your Operating Agreement will not list the names of the officers, only establish the LLC"s authority to name officers.

While not legally required, assigning roles to the Members or employees as Officers of the LLC may be helpful in outlining the scope of their authority, demonstrating appropriate separation of assets between the Members and the Company, and conducting the business of the Company. Traditionally included Officers are Chairman, President, Vice President, Secretary, and Treasurer.

An LLC may elect to be taxed as a corporation instead of a partnership or sole partnership. If an LLC wishes to be taxed as a corporation, it must first meet certain criteria and must file additional paperwork with the IRS in order to be eligible.

An LLC can be taxed by the Internal Revenue Service as either a pass-through entity (taxed like a partnership) or as a C-corporation (taxed like a corporation). The default is to tax the LLC like a partnership, but the LLC can easily change its tax status to C-corporation by filing paperwork with the IRS. This might alter the amount of tax that the LLC will pay to the federal government each tax year. For more information, consult the IRS website.

How will the LLC distribute its profits to Members and how often will the profits be distributed? The LLC will distribute money from the company"s total profits to the company"s Members in a process called a "profit allocation." Typically, company profits are provided to the Members from the company in the form of a check at routine intervals, much like a salary. The amount paid to each member will change according to the company"s profits for that period.

Deciding what happens when the business is dissolved may seem like putting the cart before the horse, but it can prevent legal problems and headaches down the road. Consider how to handle assets, cash on hand, and debts if the LLC is ever dissolved, and do so before finalizing your Operating Agreement. Also choose the type of vote necessary if the Members decide to dissolve the LLC without a withdrawal or death of a Member.

All members should sign the LLC Operating Agreement to make it official. You can do this electronically via RocketSign®. Notarization is typically not required for your Operating Agreement to be legally effective, but some organizations such as title companies, financial institutions, or investors may require notarization to buy property, open a bank or credit account, or secure funding for your LLC.

A copy of the Operating Agreement can be kept with the LLC’s official company records and all members should keep a separate copy in their personal records. If additional Members are added to the LLC later, they should sign and receive their own copy of the Operating Agreement.

Registering an LLC in Texas is a straightforward process. Here’s a look at the steps to take, plus a few details to know when selecting your LLC business name and setting up your Texas LLC.

Business name must be unique: Texas doesn’t allow different businesses to operate under the same name. To avoid delays and filing correction fees, it’s essential to choose a business name that’s different from any other business registered in Texas. The free Texas taxable entity search website makes it easy to research available business names for your LLC.

Every Texas LLC must have a registered agent who is a Texas resident with a physical address within the state of Texas. The agent must be regularly available at the physical address and agree to accept business-related paperwork and legal notices.

The registered agent can be an LLC member or an employee of the business. However, if no Texas residents are connected with the LLC, you can use a registered agent service to meet this requirement. Annual costs for Texas registered agent services typically range from $100 to $300.

Once you have your new LLC business name and registered agent, you can complete the appropriate LLC formation document and file it with the Texas Secretary of State.

Form 205 Certificate of Formation—Limited Liability Company: This form establishes a new LLC within the state of Texas. You can download the form and mail it in, or complete and submit it online through the Texas SOSDirect website. The filing fee for Form 205 is $300.

Form 304 Application for Registration of a Foreign Limited Liability Company: This form is used by LLCs established outside of Texas that want to conduct business in Texas. This form is available for download to mail in or can be completed and submitted on SOSDirect. The filing fee for Form 304 is $750.

Once your LLC is filed and formed, it’s time to create an operating agreement. Texas doesn’t require you to file this document, so you won’t include it in your LLC formation application. However, that doesn’t mean it’s not business-critical.

Your LLC operating agreement details vital information about the LLC structure, member roles and responsibilities, ownership shares, transferability, assets, operating procedures and more. By signing this legally binding document, all LLC members agree to be bound to and protected by its terms and conditions.

An LLC operating agreement isn’t a legal requirement for Texas LLC business formation. However, business attorneys, accountants and advisors overwhelmingly recommend having an operating agreement to legally protect the LLC and its members. Plus, most bankers and business lenders require an operating agreement to secure LLC bank accounts and lines of credit. Investors also consider operating agreements in their investment decisions.