Does a Single Member LLC need an Operating Agreement?

Single Member LLC 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 operates, and protect your business from default state laws. Even if you are the only member, you are still running a business and it will be useful if you map out how your business will operate.

Is an LLC required to have an Operating Agreement?

Depending on your state, an Operating Agreement may be required.

MAKE YOUR FREE Single Member LLC Operating Agreement

The terms in your document will update based on the information you provide.

Select state:

Make document

MAKE YOUR FREE Single Member LLC Operating Agreement

Make document

Create Your Document In Just 3 Easy Steps:

Build your document

Answer a few simple questions to make your document in minutes

Save, print & share

Save progress and finish on any device, download & print anytime

Sign & make it legal

Securely sign online and invite others to sign

OTHER NAMES Single Member Operating Agreement

What is a Single Member LLC Operating Agreement?

Single Member LLC Operating Agreements help you communicate how your business will operate, how it is separate from your personal finances, and how you plan to pay yourself. Potential investors will also want to see your Operating Agreement to help them decide if they want to invest. In some states, you may be legally required to have an LLC Operating Agreement.

Even if you are not legally required to have an Operating Agreement in your state, one major reason for having a Single Member LLC Operating Agreement is to dictate what should occur if the company needs to dissolve. In this case, you'll need to define how the company should dissolve and what is to happen with liabilities and assets should you die or become unable to run your business.

When can you use a Single Member LLC Operating Agreement?

You're ready to form a Single Member LLC and you want to define its business terms.
You've already formed a Single Member LLC but don't yet have an operating agreement.

This document has been customized over 32.7K times

Legally binding and enforceable

Complies with relevant laws

Ask a lawyer questions about your document

Sign this document online for free with RocketSign®

Operating Agreement of

A Single Member Limited Liability Company


.	Formation.


	a.	State of Formation. This is a Limited Liability Company Operating Agreement (the "Agreement") for , a single member limited liability company (the "Company") formed under and pursuant to law.


	b.	Operating Agreement Controls. To the extent that the rights or obligations of the Member or Company under provisions of this Operating Agreement differ from what they would be under law absent such a provision, this Agreement, to the extent permitted under law, shall control.


	c.	Primary Business Address. The location of the primary place of business of is:


		, , , or such other location as shall be selected from time to time by the Member.


		's mailing address is:


		, ,


	d.	Registered Office. The Company may change its registered office upon filing a statement with the Secretary of State.


	e.	No State Law Partnership. No provisions of this Agreement shall be deemed or construed to constitute a partnership (including, without limitation, a limited partnership) or joint venture, or any Member a partner or joint venturer of or with any other Member, for any purposes other than state tax purposes.


.	Purposes and Powers.


	a.	Purpose. is created for the following business purpose: .


	b.	Powers. The Company shall have all of the powers of a limited liability company set forth under law.


	c.	Duration. 's term shall commence upon the filing of a Certificate of Formation and all other such necessary materials with the . The Company will operate until unless:


	i.	The Member votes to dissolve the Company;


	ii.	No Member of the Company exists, unless the business of the Company is continued in a manner permitted by law;


	iii.	It becomes unlawful for either the Member or the Company to continue in business;


	iv.	A judicial decree is entered that dissolves the Company; or


	v.	Any other event results in the dissolution of the Company under federal or law.


.	Member.


	a.	The Member. The sole member of at the time of adoption of this Agreement is (the "Member").


	b.	Initial Contribution. The Member shall make an Initial Contribution to the Company. The Contribution shall consist of


	cash in the amount of:


		No Member shall be entitled to interest on their Initial Contribution. Except as expressly provided by this Agreement, or as required by law, no Member shall have any right to demand or receive the return of their Initial Contribution.


	c.	Limited Liability of the Member. Except as otherwise provided for in this Agreement or otherwise required by law, no Member shall be personally liable for any acts, debts, liabilities or obligations of the Company beyond their respective Initial Contribution. The Member shall look solely to the Company property for the return of their Initial Contribution, or value thereof, and if the Company property remaining after payment or discharge of the debts, liabilities or obligations of the Company is insufficient to return such Initial Contributions, or value thereof, no Member shall have any recourse against any other Member, if any other Member exists, except as is expressly provided for by this Agreement.


	d.	Creation or Substitution of New Members. Any Member may assign in whole or in part its Membership Interest only with the prior written consent of all Members.


	i.	If a Member transfers all of its Membership Interest, the transferee shall be admitted to the Company as a substitute Member upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement. Such admission shall be deemed effective immediately upon the transfer, and, simultaneously, the transferor Member shall cease to be a Member of the Company and shall have no further rights or obligations under this Agreement.


	ii.	If a Member transfers only a portion of its Membership Interest, the transferee shall be admitted to the Company as an additional Member upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement.


	iii.	Whether a substitute Member or an additional Member, absent the written consent of all existing Members of the Company, the transferee shall be a limited Member and possess only the percentage of the monetary rights of the transferor Member that was transferred without any voting power as a Member in the Company.


	e.	Voting Power of the Members. In the event that the Company has multiple Members simultaneously,

state of


	g.	Waiver of Partition: Nature of Interest. Except as otherwise expressly provided in this Agreement, to the fullest extent permitted by law, each Member hereby irrevocably waives any right or power that such Member might have to cause the Company or any of its assets to be partitioned, to cause the appointment of a receiver for all or any portion of the assets of the Company, to compel any sale of all or any portion of the assets of the Company pursuant to any applicable law or to file a complaint or to institute any proceeding at law or in equity to cause the dissolution, liquidation, winding up or termination of the Company. No Member shall have any interest in any specific assets of the Company.


	h.	Fiduciary Duties of the Member. The Member shall have no fiduciary duties whatsoever to the Company or, in the event that the Company has multiple Members, to other Members, unless the Member is a Manager of the Company, in which instance they shall owe only the respective fiduciary duties of a Manager, as applicable. No Member shall bear any liability to the Company or to other present or former Members by reason of being or having been a Member.


	h.	Fiduciary Duties of the Member. The Member shall have only the minimum fiduciary duties of loyalty and care required under Florida Revised Limited Liability Company Act. Such duties shall only be owed to the Company and not to the other Members of the Company, in the event that the Company has other Members. No Member shall bear any liability to the Company or to other present or former Members by reason of being or having been a Member.


	i.	Loyalty and Care. Except to the extent otherwise provided herein, the Member shall have a fiduciary duty of loyalty and care similar to that of members of limited liability companies organized under the laws of .


	i.	Loyalty and Care. The Member shall have only the fiduciary duties of loyalty and care required under Florida Revised Limited Liability Company Act.


	1.	Loyalty. The duty of loyalty shall be limited to:


	a.	Not usurping or otherwise appropriating an opportunity of the Company;


	b.	Refraining from competing against the company in the conduct of the Company's activities;


	c.	Maintaining an account of any property, profit or benefit derived by the Member in the conduct or winding up of the Company's affairs, or by the use of the Company's property.


	2.	Care. The duty of care shall be limited to refraining from engaging in grossly negligent or reckless conduct, willful or intentional misconduct, or a knowing violation of law.


	v.	Other Considerations. In discharging the Member's duties, the Member may consider factors that the Member deems relevant, including the long-term prospects and interests of the Company and its Member, and the social, economic, legal, or other effects of any action on the employees, suppliers, and customers of the Company, the communities and society in which the Company operates, and the economy of Florida and the nation.


.	Distributions.

The Company's fiscal year shall end on the last day of . Distributions shall be issued on a basis, based upon the Company's fiscal year. The distribution shall not exceed the remaining net cash of the Company after making appropriate provisions for the Company's ongoing and anticipatable liabilities and expenses. The Member shall receive a percentage of the overall distribution that matches the Member's percentage of Membership Interest in the Company.


.	Tax Treatment Election.

state of


	a.	Loyalty and Care. Except to the extent otherwise provided herein, each Manager shall have a fiduciary duty of loyalty and care similar to that of managers of business corporations organized under the laws of .


	a.	Loyalty and Care. The Managers shall have only the fiduciary duties of loyalty and care required under Florida Revised Limited Liability Company Act.


	e.	Other Considerations. In discharging the Managers duties, the Manager may consider factors that the Manager deems relevant, including the long-term prospects and interests of the Company and its Members, and the social, economic, legal, or other effects of any action on the employees, suppliers, and customers of the Company, the communities and society in which the Company operates, and the economy of Florida and the nation.


	a.	Loyalty and Care. Except to the extent otherwise provided herein, each Manager and Officer shall have a fiduciary duty of loyalty and care similar to that of managers and officers of business corporations organized under the laws of .


	a.	Loyalty and Care. The Managers and Officers shall have only the fiduciary duties of loyalty and care required under Florida Revised Limited Liability Company Act.


	e.	Other Considerations. In discharging the Manager's or Officer's duties, the Manager or Officer may consider factors that the Manager or Officer deems relevant, including the long-term prospects and interests of the Company and its Members, and the social, economic, legal, or other effects of any action on the employees, suppliers, and customers of the Company, the communities and society in which the Company operates, and the economy of Florida and the nation.


.	Dissolution.


	a.	Limits on Dissolution. The Company shall have a existence, and shall be dissolved, and its affairs shall be wound up only upon the provisions established in Section II(c) above.


		Notwithstanding any other provision of this Agreement, the Bankruptcy of any Member shall not cause such Member to cease to be a Member of the Company and upon the occurrence of such an event, the business of the Company shall continue without dissolution.


		Each Member waives any right that it may have to agree in writing to dissolve the Company upon the Bankruptcy of any Member or the occurrence of any event that causes any Member to cease to be a member of the Company.


	b.	Winding Up. Upon the occurrence of any event specified in Section II(c), the Company shall continue solely for the purpose of winding up its affairs in an orderly manner, liquidating its assets, and satisfying the claims of its creditors. The Member, or in the event of multiple Members one or more Members selected by the remaining Members, shall be responsible for overseeing the winding up and liquidation of Company, shall take full account of the liabilities of Company and its assets, shall either cause its assets to be distributed as provided under this Agreement or sold, and if sold as promptly as is consistent with obtaining the fair market value thereof, shall cause the proceeds therefrom, to the extent sufficient therefor, to be applied and distributed as provided under this Agreement.


	c.	Distributions in Kind. Any non-cash asset distributed to one or more Members in liquidation of the Company shall first be valued at its fair market value (net of any liability secured by such asset that such Member assumes or takes subject to) to determine the profits or losses that would have resulted if such asset were sold for such value, such profit or loss shall then be allocated as provided under this Agreement. The fair market value of such asset shall be determined by the Members or, if any Member objects, by an independent appraiser (any such appraiser must be recognized as an expert in valuing the type of asset involved) approved by the Members.


	d.	Termination. The Company shall terminate when (i) all of the assets of the Company, after payment of or due provision for all debts, liabilities and obligations of the Company, shall have been distributed to the Member in the manner provided for under this Agreement and (ii) the Company's registration with the shall have been canceled in the manner required by law.


	e.	Accounting. Within a reasonable time after complete liquidation, the Company shall furnish the Member with a statement which shall set forth the assets and liabilities of the Company as at the date of dissolution and the proceeds and expenses of the disposition thereof.


	f.	Limitations on Payments Made in Dissolution. Except as otherwise specifically provided in this Agreement, each Member shall only be entitled to look solely to the assets of Company for the return of its Initial Contribution and shall have no recourse for its Initial Contribution and/or share of profits (upon dissolution or otherwise) against any other Member, if any other such Member exists.


	g.	Notice to Authorities. Upon the winding up of the Company, the Member with the highest percentage of Membership Interest in the Company shall be responsible for the filing of all appropriate notices of dissolution with and any other appropriate state or federal authorities or agencies as may be required by law.


.	Exculpation and Indemnification.


	a.	No Member, Manager, employee or agent of the Company and no employee, agent or Affiliate of a Member (collectively, the "Covered Persons") shall be liable to the Company or any other person who has an interest in or claim against the Company for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Covered Person by this Agreement, except that a Covered Person shall be liable for any such loss, damage or claim incurred by reason of such Covered Person's gross negligence or willful misconduct.


	b.	To the fullest extent permitted by applicable law, a Covered Person shall be entitled to indemnification from the Company for any loss, damage or claim incurred by such Covered Person by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Covered Person by this Agreement. Expenses, including legal fees, incurred by a Covered Person defending any claim, demand, action, suit or proceeding shall be paid by the Company. The Covered Person shall be liable to repay such amount if it is determined that the Covered Person is not entitled to be indemnified as authorized in this Agreement. No Covered Person shall be entitled to be indemnified in respect of any loss, damage or claim incurred by such Covered Person by reason of such Covered Person's gross negligence or willful misconduct with respect to such acts or omissions. Any indemnity under this Agreement shall be provided out of and to the extent of Company assets only.


	c.	A Covered Person shall be fully protected in relying in good faith upon the records of the Company and upon such information, opinions, reports or statements presented to the Company by any person as to matters the Covered Person reasonably believes are within such other person's professional or expert competence and who has been selected with reasonable care by or on behalf of the Company, including information, opinions, reports or statements as to the value and amount of the assets, liabilities, or any other facts pertinent to the existence and amount of assets from which distributions to the Member might properly be paid.


	d.	To the extent that, at law or in equity, a Covered Person has duties (including fiduciary duties) and liabilities relating thereto to the Company or to any other Covered Person, a Covered Person acting under this Agreement shall not be liable to the Company or to any other Covered Person for its good faith reliance on the provisions of this Agreement. The provisions of the Agreement, to the extent that they restrict the duties and liabilities of a Covered Person otherwise existing at law or in equity, are agreed by the Member to replace such other duties and liabilities of such Covered Person.


	e.	The foregoing provisions of this Article shall survive any termination of this Agreement.


.	Insurance.

The Company shall have the power to purchase and maintain insurance, including insurance on behalf of any Covered Person against any liability asserted against such person and incurred by such Covered Person in any such capacity, or arising out of such Covered Person's status as an agent of the Company, whether or not the Company would have the power to indemnify such person against such liability under the provisions of Article or under applicable law.


.	General Provisions.


	a.	Notices. All notices, offers or other communications required or permitted to be given pursuant to this Agreement shall be in writing and may be personally served or sent by United States mail and shall be deemed to have been given when delivered in person or three (3) business days after deposit in United States mail, registered or certified, postage prepaid, and properly addressed, by or to the appropriate party.


	b.	Number of Days. In computing the number of days (other than business days) for purposes of this Agreement, all days shall be counted, including Saturdays, Sundays and holidays; provided, however, that if the final day of any time period falls on a Saturday, Sunday or holiday on which national banks are or may elect to be closed, then the final day shall be deemed to be the next day which is not a Saturday, Sunday or such holiday.


	c.	Execution of Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, and all of which shall together constitute one and the same instrument.


	d.	Severability. The provisions of this Agreement are independent of and separable from each other, and no provision shall be affected or rendered invalid or unenforceable by virtue of the fact that for any reason any other or others of them may be invalid or unenforceable in whole or in part.


	e.	Headings. The Article and Section headings in this Agreement are for convenience and they form no part of this Agreement and shall not affect its interpretation.


	f.	Controlling Law. This Agreement shall be governed by and construed in all respects in accordance with the laws of the state of (without regard to conflicts of law principles thereof).


	g.	Application of Law. Any matter not specifically covered by a provision of this Agreement shall be governed by the applicable provisions of law.


	h.	Amendment. This Agreement may be amended only by written consent of the Board and the Member. Upon obtaining the approval of any such amendment, supplement or restatement as to the Certificate, the Company shall cause a Certificate of Amendment or Amended and Restated Certificate to be prepared, executed and filed in accordance with law.


	i.	Entire Agreement. This Agreement contains the entire understanding among the parties hereto with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements and understandings, inducements or conditions, express or implied, oral or written, except as herein contained.

IN WITNESS WHEREOF, the Member has executed and agreed to this Limited Liability Company Operating Agreement, which shall be effective as of .


By:	Date:

Our quality guarantee

We guarantee our service is safe and secure, and that properly executed Rocket Lawyer legal documents are legally enforceable under applicable US laws.

Need help? No problem!

Ask a question for free or get affordable legal advice when you connect with a Rocket Lawyer network attorney.

Complete your free Single Member LLC Operating Agreement with our Make it Legal™ checklist

Make this document

Customize your Single Member LLC Operating Agreement by answering simple questions. We’ll help you along the way and build a document that fits your needs. Plus, you can always save and continue later once you’ve started your document creation process. Get started now!
Sign this document

This document needs to be signed by the LLC Member.

The Operating Agreement can be signed online. It becomes effective as of the date specified in the Operating Agreement.

Neither witnesses nor notarization are required for the Operating Agreement to be effective.
Securely sign online and invite others to sign with RocketSign®
Keep two copies.

The LLC should keep one copy of the Operating Agreement with its corporate records.

If additional Members are added to the LLC later, they should sign and receive their own copy of the Operating Agreement.
Important Details
- An LLC Operating Agreement is used after a Limited Liability Company has already been formed through your Secretary of State's office. The Agreement allows your company to customize and control your LLC's operating rules. Without the Agreement, your LLC will operate under the state's default LLC laws.
- The LLC Operating Agreement creates significant legal obligations for Members of the LLC. Each Member should be given the opportunity to speak with an attorney independently before entering this Agreement if they have any questions or concerns.
- Washington's Limited Liability Company Act allows for LLCs to have a class of members with no voting rights. Please contact an attorney if this is the case with your business.
- Reminder: Under the terms of article titled "Tax Treatment Election," the Company has already or will file Form 8832 with the Internal Revenue Service and affirmatively elect to be treated as a corporation for federal tax purposes. The Company must take this step in order to receive federal corporate tax status.

Try Rocket Lawyer FREE for 7 days

Start your Premium Membership now and get legal services you can trust at prices you can afford. You’ll get:

All the legal documents you need—customize, share, print & more

Unlimited electronic signatures with RocketSign^®

Ask a lawyer questions or have them review your document

Dispute protection on all your contracts with Document Defense^®

30-minute phone call with a lawyer about any new issue

Discounts! Incorporate for FREE + hire a lawyer with up to 40% off*

*Free incorporation for new members only and excludes state fees. Lawyer must be part of our nationwide network to receive discount.

Single Member LLC Operating Agreement FAQs

Collapse all

Expand all

Does a Single Member LLC need an Operating Agreement?

Single Member LLC 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 operates, and protect your business from default state laws. Even if you are the only member, you are still running a business and it will be useful if you map out how your business will operate.
Is an LLC required to have an Operating Agreement?

Depending on your state, an Operating Agreement may be required.
What if an LLC has no Operating Agreement?

Even if you are not legally required to have an Operating Agreement in your state, one major reason for having a Single Member LLC Operating Agreement is to dictate what should occur if the company needs to dissolve. In this case, you'll need to define how the company should dissolve and what is to happen with liabilities and assets should you die or become unable to run your business.

Ask a lawyer

Our network attorneys are here for you.

About Single Member LLC Operating Agreements

Learn how to set forth a management plan for your LLC

Collapse all

Expand all

How To Write a Single Member LLC Operating Agreement
Many Limited Liability Companies (LLCs) are formed with multiple members, but LLCs may also be formed when there is only one member. Every state (and the District of Columbia) allows for the creation of Single Member LLCs. While it might be tempting to skip business formalities when there is just one person running the show, putting together an Operating Agreement adds legitimacy to the business operation and may be required in some situations.

A Single Member LLC Operating Agreement is used to outline the terms of a new LLC. The LLC Operating Agreement is used to set the rules for how the specific LLC will be managed, as opposed to just following the standard rules of the state of incorporation. The LLC Operating Agreement can set forth operational details, including contribution amounts, the duration of the LLC, and whether or not the LLC will have officers.

Here are some of the clauses and types of information you may encounter as you make your own Single Member LLC Operating Agreement.

Company Duration

Single Member LLCs may operate for a set period of time or until the Member dissolves it. This is usually communicated when the Articles or Certificate is filed with the state of incorporation. The Operating Agreement should reflect whether or not the LLC is for a limited period of time.

Company Officers

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

Company Purpose

Most states require a general statement of purpose for LLCs being formed in their state. The purpose can be something very broad, such as "manufacturing" or "email marketing," but it is often best to write it out in a full sentence, for example "The purpose of Smith & Sons LLC is the manufacture of various goods." The purpose can even be as broad as, "The purpose of this limited liability company is to engage in any lawful act or activity for which a limited liability company may be organized under state and federal law."

Contributions

Typically, when an LLC is formed, a Member makes a contribution to the LLC in the form of capital investment or property investment. This section of the Agreement can be used to list the Member's contributions to the LLC. The total value of the Member's investment may be listed, including the appraised value of any real property.

LLC Management

A Single Member LLC may be managed by its Member or by one or more Managers. If a Single Member LLC is Member-Managed, the single Member plays the role of both Member and Manager. If the Single Member LLC is Manager-Managed, then the day-to-day operations of the LLC may be controlled by an appointed Manager or Managers.

Mailing Address

The LLC's Mailing Address is where the state will mail notices, in the event that it needs to do so. A P.O. Box for the Mailing Address may be used.

Member

The Member is the owner of the LLC. This person typically contributes some amount of money or property to the LLC as an initial contribution. The Member can sell or transfer all or some of their ownership in the LLC and add new Members, if they choose, as well as select the members of the LLC's board of directors. The Member will decide when or if the LLC is to cease operations and dissolve, or "wind up," the company.

Primary Business Address

The LLC's "Primary Business Address" is the address from where the LLC will operate. A physical address must be used, instead of a P.O. Box, for the Primary Business Address. The Member's place of residence may be used if there is no separate business office.

A few states (Alaska, Arizona, Louisiana, Maryland, New Hampshire, and South Dakota) require that LLC's registered in 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 instead require a Registered Agent or Registered Office within the state for service of process or other notifications.

Profit Allocation

The LLC may distribute money from the company's total profits to the company's Member in a process called a "profit allocation." The profit allocation is typically held within the company, but is essentially assigned to the Member according to their percentage of ownership. Company profits may be held within the company or the Member may choose to receive a portion of their profit allocation from the company in the form of a check at routine intervals, much like a salary. The Operating Agreement may specify how many times per year the profit allocation will be distributed from the company to the Member. These percentages may be changed at any time by a Member vote. The amount will change according to the company's profits.

The LLC's fiscal calendar will impact the frequency of the distributions, unless they're monthly distributions, because the LLC's quarters, half-years and years will end according to the fiscal calendar. If the fiscal calendar ends in August, then quarterly profit allocations would be paid at the end of November, February, May and August rather than the distributions following a calendar year and being paid out at the end of March, June, September and December.

Registered Offices and Agents

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. Some states require both, while very few states do not require a registered agent or office. Each of the 50 states may have their own particular definitions of these terms, but they mostly conform to the definitions below:
- A Registered Agent is a person who is an agent for service of process on the limited liability company who is appointed by the limited liability company and whose address is the Registered Office of the limited liability company. Some states require that registered agents be residents of their state, and that they use an in-state registered address, no P.O. Boxes permitted.
- A Registered Office is the office maintained by the limited liability company in a state at which any process, notice, or demand required or permitted by law may be served upon the Registered Agent of the limited liability company. It cannot be a P.O. Box.
Tax Treatment Election

An LLC can be taxed by the Internal Revenue Service as either a pass-through entity (taxed like a partnership or a “disregarded” entity) or as an S Corporation or C Corporation (taxed like a corporation). The default is to tax the LLC like a partnership if there are two or more members, but the LLC can easily change its tax status to an S Corporation or C Corporation by filing paperwork with the IRS. If there is only one member, the IRS treats the LLC as an entity disregarded as separate from its owner, unless the owner elects to be treated as a corporation.

Signing and Delivering

Once the Member has signed the Agreement, it is final. The LLC and Member should each receive and keep their own copy.
Collapse

Term	Definition
Limited Liability	The legal protection enjoyed by members of an LLC against personal responsibility for business debts and other business-related liabilities. A business creditor cannot go after a member’s personal assets, nor can a member’s personal creditor seize business assets. Limited liability might not apply in certain situations, such as if a member uses the LLC to engage in illegal activity.
Profit Allocation	The allocation of profits among LLC members based on their percentage of ownership, or another mutually-agreed percentage, in an LLC that has elected partnership taxation. An LLC taxed as a partnership does not pay taxes itself. Instead, profits and losses pass through to the members, who pay taxes on their allocated shares of profits or deduct their allocated share of losses.
Registered Agent	An individual or business designated by an LLC or other business entity to receive service of process and government notices on its behalf. A Registered Agent must have a physical location in the state where the LLC is registered. A member of an LLC may serve as the LLC’s Registered Agent. Some lawyers or law firms will serve as registered agents, and some businesses will provide registered agent services in exchange for an annual fee.

Collapse