The operating agreement acts as a key part of any Florida LLC. It helps to outline the role that all involved parties in the company have. It also serves as a contract that outlines the rights, duties, and obligations of both managers and members. There is no legal requirement to have an LLC operating agreement in Florida. Even so, you should never skip this step due to its importance.
Creating and Signing the Agreement
Operating agreements for LLCs should be flexible. These agreements can have broad modifications in the future. The rule is that the changes to the agreement are allowed in most cases, provided they do not contradict internally or violate the official LLC Act. When creating your operating agreement, you can do it yourself or hire outside assistance. If you hire a service, you will have the option of using a pre-created template with minor personalization or having an attorney create a custom one. Obviously, the latter will cost more, but it will also be more specific to your needs.
Be sure that if you do create your operating agreement – which you should, that every member signs it. You do not need to have each member sign the same exact copy. It is possible to use multiple physically separate copies as long as every member has signed one. This allows for the simplicity of each member printing and signing a copy before submitting it. That saves on the time spent and postage fees.
Since operating agreements are not legally required, you may wonder if they are really worth your time. While they will take a bit of time to create, and possibly entail a small fee if you hire an outside service for assistance, they are worth it. Essentially, creating an operating agreement is the best way to prevent future disagreements.
To give you an idea of what could happen without an operating agreement, consider a business with multiple owners but there is no written agreement as to who owns what. This can go poorly in two directions. If the business does very well, the owners may fight over profits. If it fails, they may fight over liability. In either situation, you would have a tough task on your hand of sorting out the problems and ensuring profits or liabilities are evenly divided up.
Even LLCs With a Single Member Should Have Operating Agreements
If operating agreements prevent conflict, you may wonder if single-member LLCs actually need them. After all, you cannot sue yourself for profits or liabilities. Despite this, the presence of an operating agreement helps your LLC maintain its professional appearance. It is a corporate formality that will assist your reputation.
There is also the fact that many banks ask LLCs for operating agreements when opening accounts. You will likely eventually find a bank that lets you open an account without one, but it will be a hassle. Do not forget to consider what happens if something happens to you. If there is no operating agreement or trust, the LLC will likely be probated. An operating agreement can prevent this by naming a beneficiary.