In Indiana, an LLC operating agreement is a legal agreement between LLC members that outlines the administrative and operational procedures for managing the company's business.

Indiana LLC Operating Agreement

Although an Indiana LLC is not legally required to file the operating agreement, it is advisable to do so, regardless of the size of your company. Unlike the LLC formation documents, you need not mail the operating agreement to the State. This agreement is an internal document of the company, so be sure to keep it with your business records.

In the absence of an operating agreement, default state laws would apply to your LLC, which could make you personally liable for the business debts of the company. An operating agreement formally separates your personal assets and accounts from those of the LLC. It protects the LLC members from legal vulnerability in case of litigation.

An operating agreement is a prerequisite for obtaining tax benefits under state law.

You should closely read the LLC's operating agreement. If any part is confusing or unclear, you should consult an attorney for clarification.

For multi-member LLCs, the operating agreement establishes a formal business relationship among the members. For a single-member LLC, the operating document declares the business as a different entity from its owner.

An operating agreement lists the members and defines their respective percentages of ownership of the company. It also outlines the procedures for managing the LLC, payment of taxes, and distribution of profits and losses among the members.

How to Write the LLC Operating Agreement

Step 1

  • Establish the document.
  • Enter the name of your LLC at the top of the document.

Step 2

  • Enter the date of the agreement.
  • Check all the boxes applicable to you.
  • Enter the information for all the checked items.
  • For a single-member LLC, enter the name of the company and the state where it's located. Enter the name and address of the owner.
  • For a multi-member LLC, enter name and address of all the members.

Step 3

  • Enter the company name and its principal place of business.
  • Under the “Formation” section, enter the date of company formation.
  • In the “Capital Contributions” section, check the applicable box. For single-member LLCs, follow the instructions given. For multiple-member LLCs, enter the name and capital contribution of each member.
  • Check the applicable boxes under the “Distributions” section. For single-member LLCs, go through the provided information. For multi-member LLCs, mention each member's percentage of interest (ownership) next to their names.

Step 4

  • Fill in the information pertaining to bank accounts and company's management according to the instructions provided.
  • Check the applicable boxes for single and multiple members.

Step 5

  • Check the applicable boxes.
  • Fill in the information pertaining to members' meetings, assignment of interests, admission of new members, liquidation, membership certificates, and other details.

Step 6

  • Collect signature of members.
  • Enter the date of the agreement.
  • Submit the name and signature of the company representative.

After execution of the operating agreement, provide a copy of the document to all the members. The company should also keep the document with it.

How to Form an LLC in Indiana

First of all, be sure that an LLC is the right business structure for you. An LLC offers the benefits of both corporations and partnership firms, like organizational flexibility, tax efficiencies, and limited liability protection. It can have any number of members, including individuals, other LLCs, corporations, and non-resident aliens.

Once you have decided to form an LLC, choose a suitable name. The name must end with “Limited Liability Company”, “LLC”, or something similar. Using certain words, like university, bank, and attorney is subject to additional formalities. Avoid using prohibited words like FBI and Treasury in the name of your LLC. Then, conduct a name search in order to make sure that the name is available. You may want to file an application for reserving your chosen name for up to 120 days.

After a name has been chosen, nominate an Indiana registered agent for your LLC. If you are forming a new LLC, file a domestic application. If you already have an LLC in some other state and want to expand into Indiana, file as a foreign LLC.

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