Michigan's Limited Liability Company Act governs LLCs. MCL 450.4102 defines an operating agreement as a written agreement by the sole member, or between all the members, concerning the affairs of the limited liability company and the conduct of its business. Your LLC exists once the Articles of Organization are filed with the Department of Licensing and Regulatory Affairs. The operating agreement decides everything after that, and if you skip it the Act's default rules decide for you.
The agreement is internal
You do not file the operating agreement with LARA. Keep it with company records and produce it when a bank, title company, or buyer asks who is authorized to act.
What to settle in writing
Without an agreement, the statute answers questions the owners would rather answer themselves.
- Ownership and capital: who contributed what, and what percentage it bought.
- Management: member-managed or manager-managed, and what a manager may do alone.
- Distributions: when money comes out and in what proportions.
- Exits: buyout terms on death, divorce, retirement, or a member wanting out.
Distributions have a statutory limit
The agreement decides when money comes out, but it cannot authorize a distribution the Act forbids. MCL 450.4307 sets the limit, and MCL 450.4308 makes the members or managers who voted for or assented to a distribution made in violation of it — or of the operating agreement — personally liable to the company for the excess.
This is the one place in an LLC where the liability shield does not do the work owners assume it does, and it is worth knowing before a distribution is voted rather than after.
Resident agent and registered office
MCL 450.4207 requires a Michigan LLC to continuously maintain a resident agent and a registered office in the state. The resident agent may be an individual Michigan resident whose business office or residence is identical with the registered office, or a domestic or qualifying foreign corporation or limited liability company whose business office is identical with the registered office. Michigan says 'resident agent' where some neighbours say 'registered agent'.
Michigan also requires an annual statement filed with LARA. Neither that nor the agent requirement lives in the operating agreement, but both belong on the same calendar.
Single-member LLCs need one most
One-owner LLCs skip the agreement most often, and they are the ones a creditor scrutinizes when arguing the company is indistinguishable from its owner. A signed agreement, actually observed in practice, is core evidence the company is separate.
Frequently Asked Questions
Is an operating agreement required in Michigan?
No. The LLC exists on filing the Articles of Organization. Without an agreement, the Michigan Limited Liability Company Act's defaults govern ownership, management, and exits.
Do I file it with LARA?
No. It is internal. Only the Articles of Organization, the annual statement, and resident-agent information go to the state.
Resident agent or registered agent?
Michigan's statute says resident agent. It is the same role other states call a registered agent, and MCL 450.4207 requires one continuously.
Can I amend the agreement later?
Yes, in the manner the agreement itself specifies. Put the amendment in writing and keep it with the original.