Starting and managing a limited liability company (LLC) takes a significant amount of work. As an LLC’s founder, it’s important to protect the business’s assets while still ensuring fair management. One of the keys to doing this is to establish an operating agreement, which outlines business’s organization, member rights, and management. If you need help with setting up an LLC in the Chicago area, understanding the basics of operating agreements, and finding the right legal professionals to assist you, this guide will help you get started.

What is an Operating Agreement?

An operating agreement is a legal contract between the members of an LLC that’s formally recognized by the state. It provides critical information and directions about how the business is managed, including the rights and responsibilities of members. It also states the authority of each LLC member, defines ownership interests, and outlines information about how the business is to be run.

Legally Speaking, Do I Need an Operating Agreement?

Creating an operating agreement is a highly recommended step when forming an LLC, but it’s not legally required in all states, including Illinois. It is, however, required in other states, including Delaware, which is sometimes chosen as the jurisdiction of formation for Chicago-based LLCs. Generally, having an operating agreement is a good practice, as it sets out the company's information in writing and ensures that everyone in the LLC understands it.

What Should an Operating Agreement Include?

An operating agreement should contain several key pieces of information about the LLC, including the owners' names and addresses, the business’s formation date and duration, and the business’s registered agent and address. The operating agreement should also include information about how the business is to be managed, such as details about the managers' authority, the members' voting rights, the transfer of interest, and other similar financial and administrative decisions.

Finding the Right Legal Professional to Help You

Finding the right lawyer to assist with setting up an LLC and establishing an operating agreement is an important step in the process. Thankfully, UpCounsel provides access to an extensive network of experienced and knowledgeable lawyers who specialize in LLC services in Chicago. With UpCounsel, you have the ability to evaluate the professionals’ qualifications and reviews to find the ideal match for your needs.

Conclusion

Creating an LLC in Chicago and putting together an operating agreement that adequately outlines and protects the business’s assets is an important step in maintaining a successful LLC. It’s important to seek assistance from a qualified and experienced legal professional, who can assist with navigating the complexities of Illinois LLC laws. UpCounsel’s network of experienced legal professionals provides businesses of all sizes with high quality and cost-effective services.

Topics:

Operating Agreement,

LLC,

Chicago