A limited liability company, or LLC, is a popular form of business structure among small business owners because of its combination of limited liability protection and pass-through federal taxation. An operating agreement is a contract that regulates how the LLC will be operated. Amending this agreement for an Ohio LLC does not require filing any document with any Ohio government agency.
An operating agreement for an Ohio LLC generally covers all aspects of how an LLC is to be managed, and typically contains a list of all LLC members and managers; how LLC voting is to take place; how to add and remove members and managers from the LLC; the obligations of LLC members to invest capital and services into the LLC; and a specific procedure for winding down the LLC's operations.
Amending by Executing an Amendment
Sometimes, the need to amend an operating agreement arises due to a minor issue, such as the list of LLC members and managers or the voting threshold for a specific issue. Changing the operating agreement by executing an amendment is probably the best way to proceed in such cases. This involves drafting a document that only contains the new provision or provisions to the operating agreement.
Amending by Executing a New Operating Agreement
Other amendments to an Ohio LLC’s operating agreement may be more extensive in nature. For instance, amending an LLC’s operating agreement pursuant to a single-member LLC accepting other members, or the merger of an LLC with another LLC, may require a complete revision of the operating agreement. In this instance, it may be more appropriate to execute a brand new operating agreement, rather than execute numerous amendments.
Ratifying an Operating Agreement
After either an amendment to an operating agreement or a brand new operating agreement is drafted, it must be approved by the members of the LLC. Under Ohio law, an operating agreement may supply the minimum threshold for adopting changes to an LLC’s operating agreement. If there is no applicable provision in the operating agreement, Ohio law requires agreement by a majority of LLC members; LLC members should all sign the amendment after voting on it. The LLC does not need to file the changes with any Ohio government agency. However, the LLC needs to keep a copy of the amended operating agreement on file at the LLC’s registered office.