Can an LLC Operating Agreement Be Amended?

By Larissa Bodniowycz, J.D.

Can an LLC Operating Agreement Be Amended?

By Larissa Bodniowycz, J.D.

A limited liability (LLC) company operating agreement is a binding agreement that governs its structure and operations. The operating agreement is usually prepared when the LLC first forms and can be amended.

LLC Operating Agreement

Requirements for Amending an Operating Agreement

LLC owners, called members, can amend the operating agreement if the required number of members approves the change and the LLC follows required procedures. To determine the specific rules for your LLC, review your existing operating agreement.

In most cases, the LLC operating agreement sets out the number or percentage of members that must agree to an amendment. If it does not, the laws of the state where your LLC does business provide a default rule. In many states, if there is no provision in the operating agreement regarding amendment, the members must unanimously agree.

The LLC's operating agreement also usually contain provisions related to the procedures for voting for a change generally or a change to the operating agreement specifically. If not, you must once again look at state laws to determine whether there are any specific procedures you need to follow to ensure the amendment is valid and enforceable.

How to Amend an Operating Agreement

Once you are familiar with the requirements for amending your LLC's operating agreement, you can amend the agreement by following these steps.

1. Draft the proposed amendment and hold a vote.

First, write the proposed amendment to your LLC operating agreement. You can write the amendment as a separate document and attach it to the original operating agreement or you can include it in a rewrite of the entire operating agreement. For clear record keeping, amend the entire agreement when you are making a lot of changes and reserve using the attachment style for minor amendments.

Next, present the draft amendment to the other LLC members for a vote. You must follow all applicable procedural rules from the LLC's current operating agreement or state law.

2. Memorialize the vote and file the appropriate documents.

If the required number of members vote or submit written consent in favor of the amendment, memorialize the decision into a written resolution signed by all of them. You should also include if the vote and agreement occurred at an LLC meeting in the resolution.

Keep a copy of the approved amendment with LLC records. Clearly identify the effective date of the amendment to avoid future confusion about which version of the operating agreement is in effect.

The amended operating agreement does not need to be filed with the state business authority. However, certain changes made by the amendment—for example, changing the number of members—may require that you file an amendment to other documents, such the articles of incorporation. Exact requirements vary by state.

If you need assistance understanding the rules for amending an operating agreement or drafting the amendment, you should consult an online service provider. Alternatively, you may want to work with a small business attorney to revise your operating agreement and ensure its validity.

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