LLC Operating Agreement Checklist

• Who are the members, and what exact percentage does each own? Percentages should total 100 and match what each member contributed or agreed.
• What did each member contribute (money, property, services), and is any further contribution ever required?
• Member-managed or manager-managed? Who signs contracts and opens bank accounts?
• How are profits and losses split — by ownership percentage or some other agreed formula?
• When are distributions made, and who decides? In Michigan, MCL 450.4307 caps what may be distributed, and MCL 450.4308 makes members or managers who assented to a distribution made in violation of that limit or of the operating agreement personally liable for the excess.
  Source: MCL 450.4307 (the distribution limit); MCL 450.4308 (liability for a violating distribution)
• Who may serve as registered agent? Michigan requires a Michigan resident or a company whose business office matches the registered office (MCL 450.4207); Texas requires a registered agent and office continuously (Tex. Bus. Orgs. Code § 5.201); Wisconsin's registered agent and office rules are at Wis. Stat. 183.0115.
  Source: MCL 450.4207; Tex. Bus. Orgs. Code § 5.201; Wis. Stat. 183.0115
• What happens when a member wants out — can they sell, does the company or the other members get first refusal, and how is the price set?
• What happens on a member's death or incapacity?
• How are deadlocks broken in a 50/50 company?
• What does the operating agreement govern in your state? Texas lists what the company agreement may (and may not) override in Tex. Bus. Orgs. Code § 101.052; Nebraska's scope provision is Neb. Rev. Stat. 21-110.
  Source: Tex. Bus. Orgs. Code § 101.052; Neb. Rev. Stat. 21-110

This tool provides general information, not legal advice, and is not a substitute for the advice or services of an attorney. Deadlines can be affected by facts this tool does not ask about.