The LLC Operating Agreement in Ohio

By David Ingram

LLC operating agreements are fairly standard across all states, but LLC members in Ohio can take advantage of ready-made templates made specifically for the Buckeye State. Operating agreements provide a framework to guide LLC members in their duties, responsibilities and rights in the company. Although operating agreements are not legally required in all states when setting up an LLC -- Ohio does not require one --- drafting one can help members to perform their jobs efficiently.

LLC operating agreements are fairly standard across all states, but LLC members in Ohio can take advantage of ready-made templates made specifically for the Buckeye State. Operating agreements provide a framework to guide LLC members in their duties, responsibilities and rights in the company. Although operating agreements are not legally required in all states when setting up an LLC -- Ohio does not require one --- drafting one can help members to perform their jobs efficiently.

Company Information

The operating agreement begins with basic information about the company and its formation, including the name, formation date and purpose. The company's address and specified term -- if anything other than perpetual -- should be listed as well. Agreements also include contact information for a registered agent, who will be the go-to contact for official communications from the state.

Ready to start your LLC? Start an LLC Online Now

Members' Rights

The Ohio operating agreement grants rights to members by setting forth the distribution of profits and the managerial authority of each member. The agreement stipulates whether a capital account exists in the company on which members can draw, and how often withdrawals can be made. Whether members' contributions will earn interest over time, and whether members have a right to recoup their original investment on demand, is stipulated as well.

Members' Responsibilities

Members' responsibilities and expectations are set forth in the agreement as well. The agreement also specifies the up-front capital contributions of each member, as well any future contribution requirements. Managerial duties and responsibilities are listed as well.

Accounting and Tax Issues

Members agree upon accounting methods -- whether cash or accrual basis and whether single- or double-entry -- and stipulate them in the operating agreement. Other items addressed in the agreement include the dates of the chosen fiscal year and the types of bank accounts used for company funds.

Exit Provisions

Ohio LLC operating agreements include provisions for the transfer of membership stakes from an existing member to a new party, whether voluntary or performed by the will of all other members. Provisions for the dissolution of the company are included as well, setting forth how assets will be liquidated, how obligations will be covered and how any leftover assets will be distributed among the members.

Ready to start your LLC? Start an LLC Online Now
How to Start an LLC in Ohio

References

Related articles

How to Make Myself 51% Owner of an LLC

A limited liability company, or LLC, is an independent legal entity. This means that an LLC is separate from the people who own the company, and the owners are not personally liable for the debts of the business. Unlike in a corporation, owners are not stockholders who own shares of stock as evidence of their ownership interest. LLC owners are referred to as members, and ownership is reflected by keeping an account of their percentage ownership of the company in relation to other members.

How to Become a Partner of an LLC

A Limited Liability Company (LLC) may seek the addition of a new member (as LLC owners are called) in order to benefit from the individual's contributions or expertise in the business, or simply to replace a removed member. There are two ways to become a member. One way is to create an LLC with you listed as a founding member. The other way is to seek approval from an established LLC to be added as one of its members. Either method requires certain procedures and documents to be completed before the decision is considered final.

How to Sell a Percentage of an LLC

A limited liability company is owned and run by its members, and it operates according to the terms of its operating agreement and state law. An LLC is not typically structured in such a way that it's easy to add members, but it can be done. Although laws vary among states, and LLCs' operating agreements vary as well, there are certain procedures commonly involved in selling a percentage of an LLC.

LLCs, Corporations, Patents, Attorney Help

Related articles

Do All LLC's Have Operating Agreements?

An LLC, or limited liability company, is a business that combines the features of a corporation and a business ...

How to Draft LLC Operating Agreements

An operating agreement for a limited liability company (LLC) sets the parameters for how the company conducts business, ...

How to Compare an LP & an LLC

One of the biggest decisions involved in starting a business is deciding on a business structure. Limited liability ...

Adding Partners to an LLC

A limited liability company, or LLC, may be formed with any number of partners, called members. New members may be ...

Browse by category
Ready to Begin? GET STARTED