LLC Operating Agreement Kansas: Everything You Need To Know
The LLC operating agreement Kansas is used by LLCs in the state to establish operations guidelines and procedures for running all aspects of the business.2 min read
2. Steps to Create an LLC Operating Agreement
The LLC operating agreement Kansas is used by limited liability companies in the state to establish operations guidelines and procedures for running all aspects of the business. An LLC is a popular entity for small business owners because of its flexible management structure. Although this document is not required for LLCs in the state, having an operating agreement can resolve conflict in the future and protect your personal and business assets. Before signing an LLC operating agreement, each member should thoroughly review the document and engage the assistance of a qualified business attorney if necessary.
Purpose of an LLC Operating Agreement
When you do not have an operating agreement, you could be personally liable for business debts and obligations. Having this agreement in place creates a "corporate veil" between the finances of the LLC and those of its owners (referred to as members). The LLC operating agreement also allows you to access the tax advantages of this business structure.
The operating agreement may be required when your business is buying real estate, seeking financing, obtaining financial or legal assistance, or partnering with new investors or stakeholders.
Steps to Create an LLC Operating Agreement
- Download the template available from the Kansas Secretary of State.
- Enter the date on which your LLC should become active.
- Indicate whether you are forming a single-member or multi-member LLC. A single-member LLC uses the operating agreement to record daily activities, establish business procedures, and protect financial assets for a sole proprietor. LLCs with more than one member also establish policies and procedures along with roles and responsibilities.
- Provide the name and address of each member.
- Enter the name of the LLC, the city where it will be located, and the physical office address.
- Enter the purpose of your business and the term for which it will exist.
- Note whether members are making capital contributions and the amount of each.
- Indicate the ownership percentage of each member.
- Check the appropriate box under Books, Records, and Tax Returns and provide maximum amounts where applicable after reading the required information.
- Provide an annual meeting date if desired.
- Check the appropriate boxes under Ownership of Company Property and Dissolution and Liquidation.
- Include additional information where applicable, including sections for bank accounts, company management, new member admission procedures, right of first refusal, dissolution and liquidation, withdrawal events, member representation, arbitration, notices, amendments, and indemnification.
- Have each member sign and date the document, along with the signatures of any company representatives who are required to provide approval.
- Provide a signed copy to each member for his or her records.
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