Do you have to have an operating agreement when forming an LLC?
Full Question:
A friend and I filed the papers with the state to form a LLC , but there was no written operating agreement between the two of us and he refuses to proceed with it. I asked him over and over and he either ignores me or says that he will, but continues to evade the issue. Do I need to force the issue and if so, how? We have gotten our LLC back from the state and have been operating for nearly three months now and I am told that an operating agreement is necessary with an addendum to cover the procedures of how we work together. I have looked at your operating agreement but there are no examples of how to work out the day to day operations of the business. Does the operating agreement have to be registered with the state? Please advise.
06/08/2009 |
Category: LLC |
State: North Carolina |
#16895
Answer:
The operating agreement or articles of organization must be filed with the state. Resolutions may specify more specific operation of the business. State statutes provide that a member will be bound by any operating agreement, including any amendment thereto
(i) to which the member has expressly assented, or
(ii)which was in effect at the time the member became a member and either was in writing or the terms of which were actually known to the member.
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Please see the following NC statutes:
§ 57C-2-20. Formation.
(a) One or more persons may form a limited liability company by
delivering executed articles of organization to the Secretary of State
for filing. A limited liability company may also be formed through the
conversion of another business entity pursuant to Part 1 of Article 9A of
this Chapter.
(b)
(1) When the filing by the Secretary of State of the articles of
organization becomes effective, the proposed organization becomes a
limited liability company subject to this Chapter and to the purposes,
conditions, and provisions stated in the articles of organization.
(2) Filing of the articles of organization by the Secretary of State is
conclusive evidence of the formation of the limited liability company,
except in a proceeding by the State to cancel or revoke the articles of
organization or involuntarily dissolve the limited liability company.
(c) Organization of a limited liability company requires one or more
initial members and any further action as may be determined by the
initial member or members. If initial members are not identified in the
articles of organization of a limited liability company in the manner
provided in G.S. 57C-3-01(a), the organizers shall hold one or more
meetings at the call of a majority of the organizers to identify the
initial members of the limited liability company. Unless otherwise
provided in this Chapter or in the articles of organization of the limited
liability company, all decisions to be made by the organizers at such
meetings shall require the approval, consent, agreement, or ratification
of a majority of the organizers. Unless otherwise provided in the
articles of organization, the organizers may, in lieu of a meeting, take
action as described in this subection by written consent signed by all of
the organizers. The written consent may be incorporated in, or otherwise
made part of, the initial written operating agreement of the limited
liability company.
§ 57C-2-21. Articles of organization.
(a) The articles of organization must set forth:
(1) A name for the limited liability company that satisfies the
provisions of G.S. 55D-20 and G.S. 55D-21;
(2) If the limited liability company is to dissolve by a specific
date, the latest date on which the limited liability company is to
dissolve. If no date for dissolution is specified, there shall be no
limit on the duration of the limited liability company;
(3) The name and address of each person executing the articles of
organization and whether the person is executing the articles of
organization in the capacity of a member or an organizer;
(4) The street address, and the mailing address if different from the
street address, of the limited liability company's initial registered
office, the county in which the initial registered office is located, and
the name of the limited liability company's initial registered agent at
that address;
(4a) The street address, and the mailing address if different from the
street address, of the limited liability company's principal office, if
any, and the county in which the principal office, if any, is located;
and
(5) Unless all of the members by virtue of their status as members
shall be managers of the limited liability company, a statement that,
except as provided in G.S. 57C-3-20(a), the members shall not be managers
by virtue of their status as members.
(b) The articles of organization may set forth any other provision, not
inconsistent with law, including any other matter that under this
Chapter is permitted to be set forth in an operating agreement.
(c) The articles of organization need not set forth any of the powers
enumerated in this Chapter.
§ 57C-3-05. Members bound by operating agreements.
A member shall be bound by any operating agreement, including any
amendment thereto, otherwise valid under this Chapter and other
applicable law,
(i) to which the member has expressly assented, or
(ii)
which was in effect at the time the member became a member and either was
in writing or the terms of which were actually known to the member, or
(iii) with respect to any amendment, if the member was bound by the
operating agreement as in effect immediately prior to such amendment and
such amendment was adopted in accordance with the terms of such operating
agreement.
The articles of organization or written operating agreement
may require that all agreements of the members constituting the operating
agreement be in writing, in which case the term "operating agreement"
shall not include oral agreements of the members. Except to the extent
otherwise provided in a written operating agreement, a limited liability
company shall be deemed for all purposes to be a party to the operating
agreement of its member or members.
