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That said, many states do not require LLCs to create Operating Agreements. In fact, most do not. But that doesn’t mean you shouldn’t create one. As we mention in our “Why Your Limited Liability Company Needs an LLC Operating Agreement” article, these agreements allow you to customize your business structure, avoid generic state rules, and guard your limited liability.

Keep in mind that no state requires an LLC to file their bylaws or operating agreement with the Secretary of State. Instead, simply keep them with you records.

Now, here are the states that require you to create an agreement, with notes about each.

California

California LLCs are required to have an Operating Agreement. This agreement can be oral or written. If it’s written, the agreements—and all amendments to it—must be kept with the company’s records.

New York

Limited Liability Companies in New York must have a written Operating Agreement. This document should include provisions relating to the business of the LLC, the conduct of its affairs, and the rights, preferences, limitations, or responsibilities of its members.

Missouri

Similar to California, Missouri LLCs must create an Operating Agreement, but it can be written or oral. It should cover the conduct of the business, the affairs of the LLC, and the rights, powers, and duties of its members, managers, agents, or employees.

Maine

In Maine, an Operating Agreement must be entered into before, after, or during the time of filing for an LLC. This agreement can be written, oral, or even implied. In other words, it’s a fairly lenient law, but it is still a requirement in Maine. Put it in writing to avoid problems down the line.

Delaware

Similar to Maine, Delaware requires an Operating Agreement at some time before, during, or after filing LLC formation paperwork. This agreement can be implied, written, or oral.

Conclusion

If you’re forming—or have formed—an LLC in California, New York, Missouri, Maine, or Delaware, state laws require you to create an LLC Operating Agreement. But no matter what state you’re in, it’s always a good idea to create a formal agreement between LLC members. It will allow you to avoid disagreements down the road, map out exactly who is responsible for what, distribute debt and profits the way your company sees fit, and protect your all-important limited liability status.

In other words, while only 10% of state require an agreement, creating one can save you tons of hassle in the future. You don’t even need to file the agreement. Just keep it with your records. Put your company’s rules and roles on paper and protect your assets today.

 

This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.


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