Texas LLC Operating Agreement
What is a Texas LLC Operating Agreement?
Your operating agreement is the governing document of your Texas LLC. While not technically required by law, it should be considered a necessary document for your business. An operating agreement lays out the ownership of your company and basic management structure.
- Who Your Members Are & Their Ownership Percentages
- Rights & Responsibilities of Members
- Member Shares of Profits & Losses
- Management Structure (Member-Managed or Manager-Managed)
- Amendment Process
- Buy-In & Sell-Out Rules & Procedures
- Asset Distribution in Wake of Dissolution
- Rules for When a Member Leaves or Dies
Do I Really Need an Operating Agreement?
Yes. An operating agreement lays out the expectations for all members of your Texas LLC, their roles, rights and responsibilities. By writing your operating agreement early, this ensures that all your business members are clear about who will do what and how disagreements or conflicts of interest will be solved.
Furthermore, it is your operating agreement that determines ownership of your LLC. In this respect, the operating agreement is crucial. If there were ever a legal question concerning ownership of your company, a court would look to your operating agreement to determine who owns what and who is entitled to what. If there is no operating agreement, then the court will decide who owns your company and what shares they are entitled to.
Where Do I File My Operating Agreement?
An operating agreement is not filed with any government agency. It is purely an internal document. However, when opening a business banking account, some banks will ask to see your operating agreement.
What Does It Cost?
Your operating agreement can be written by your members, in which case it is free. On the other hand, you may also have an operating agreement written by a business lawyer, who will no doubt charge for this service.
If you hire Texan Registered Agent to form your LLC, we will draw up a custom LLC operating agreement at no extra charge.
Is My Operating Agreement Public?
No. An operating agreement is purely an internal document. It is not filed with any government agency and is not part of the public record.