Wyoming LLC Operating Agreement
Your Wyoming LLC operating agreement is a road map that serves as a guide through the process of dealing with questions of ownership and business management. An operating agreement establishes the rights, powers, duties, and liabilities of all members of an LLC. That’s why we provide a free Wyoming LLC operating agreement with every LLC formation we do. It covers all the basics to give your LLC the protection it deserves, and can be customized and adapted as your business grows!
Why Do I Need an Operating Agreement?
Although operating agreements aren’t required by state law, your LLC operating agreement is the most effective way to organize your company’s internal workings. Here are a few more practical reasons to have an operating agreement for your LLC:
- Protect Liability and Control
Just by forming an LLC in Wyoming, you better protect your personal and business assets. However, you can address many more details in your operating agreement. For example, can members choose to transfer their interest to someone outside the LLC? What steps should the LLC take if a creditor is awarded a member’s interest? What legal and financial actions can a member or manager engage in without approval of other members or managers? Your operating agreement can help answer these questions. - Clarify Verbal Agreements
Even if members have orally agreed to certain terms, misunderstanding or miscommunication can take place. It is always best to have the operational conditions and other business arrangements handled in writing so they can be referred to in the event of any conflict. - Avoid Relying on Default Rules
State default rules govern LLCs without an official operating agreement. This means that each state outlines default rules that apply to businesses that do not sign operating agreements. Because the state default rules are so general, it is not advisable to rely on a state governing body to manage your agreement.
The best way to protect yourself, the other members of your LLC, and the entity itself is to have a clear path through any possible issues that happen in business. A well written operating agreement gives your LLC the best chance to begin and grow with confidence.
What Should an LLC Operating Agreement Include?
Operating agreements may address any number of topics, depending on the circumstances of a particular LLC. For example, members may wish to include requirements for periodic meetings, restrictions on check signing, or processes for how disputes within the company will be handled. Keep in mind that your operating agreement can be updated at any time through a process of your choice.
When you hire us to form your Wyoming LLC, we provide you with an LLC operating agreement that covers key topics to best protect and organize your business. Whether or not you use our services, you should have an operating agreement. Here are six issues that we think your LLC’s operating agreement should cover. Our Wyoming LLC operating agreement covers these and much more.
- Organization
Organization deals with the creation of the company. It covers when the company is created, who the members are, and the structure of ownership. If there are multiple members, they may all have equal ownership or different amounts of “units” of ownership. - Management and Voting
Your operating agreement should address how the company is managed and how the members vote. The company may be managed by the members or by managers that are appointed by the members. The operating agreement specifies what authority each person has over company affairs. The company may choose to make decisions though a voting process. Votes may be allocated among the members in any number of ways, including one vote per member, one vote per unit of ownership interest (if the company ownership is described in terms of units), etc. The operating agreement may specify the number of votes required for particular actions by the company. - Capital Contributions
This section covers which members have given money to start the LLC. It also discusses how additional money will be raised by members. For example, an LLC can choose to issue ownership “units” in exchange for money. The money and other assets that members provide to start the LLC are called capital contributions. Your agreement should note each member’s contributions and their percentage of ownership interest. - Distributions
How will your company’s profits and losses be shared among members? This might include money, physical property, or other business assets. - Membership Changes
Your operating agreement should describe the process for adding or removing members. It should also state if and when members can transfer their ownership of the company. For example, the company will want to specify what happens if a member dies, a member goes bankrupt, two members divorce, etc. - Dissolving the LLC
The operating agreement should explain the circumstances in which the company may be or must be dissolved. This is sometimes called “winding up” the affairs of the company.
Also included in our Wyoming LLC operating agreement are some extras, like a Capital Contributions section and an LLC Resolution to Open a Bank Account form. The first is for each member to record the money and assets they gave to get the business started. The member in charge of opening the business bank account will complete the banking resolution with your banker.
There’s a lot that goes into writing an effective operating agreement that will protect your LLC and it’s members from disagreements, accidents, and membership changes. Why take the risk of not having one when you can get a professionally written one for free?
Is an Operating Agreement Necessary for Single Member LLCs?
Yes, an operating agreement is still necessary for your LLC, even if you’re the only member. Don’t be fooled into thinking that your LLC only needs one if there are multiple owners. Here are three reasons a single-member LLC should prepare an operating agreement:
- Your operating agreement defines your LLC
Your operating agreement allows you to define what your business will be and how it will operate. It records you as the owner and sole member. It records your capital contributions and defines your financial, organizational, and record keeping practices. Because the operating agreement is a record of this essential information, it can be used as supporting documentation for business loan and bank account applications, vendor agreements and more. - Separate the business from the owner
One of the great benefits of forming an LLC is the legal separation of the business and the owner of the business. While a single member LLC doesn’t have to deal with possible disagreements between members, its operating agreement is one of the linchpins that proves the entity is truly separate from the owner. In short, an operating agreement is just one piece of a properly formed LLC, and when a single member LLC shows that all the i’s are dotted and t’s crossed, it will go a long way in helping to ensure limited liability. Having a formal written operating agreement will lend credibility to your LLC’s separate existence. - Clarify the succession of the LLC
What will happen to your single-member LLC if you pass on? It may be a grim topic, but succession planning is a critical component of drafting a comprehensive LLC operating agreement. Clearly defining what will happen to your LLC in your operating agreement can help your business partners and your loved ones avoid unnecessary confusion and disagreements down the line.
The most common reason to form an LLC is for the protection it grants you and your personal assets. Keep that liability protection out of jeopardy with an operating agreement that protects both you and your entity.
What If I Need to Make Changes to the Operating Agreement?
As your business grows and changes, you may need to make changes to the operating agreement as well. You and your fellow LLC members can make amendments to it anytime it becomes necessary. It should already be stated in your agreement how these changes need to be made. In general, all members would vote and agree to the proposed changes written on an amendment statement. Then, it’s signed and dated and added to the top of your original agreement. Keeping a history of changes like this can save you if a legal dispute ever arises.
Amending the terms of the operating agreement on your own will never cost you money and never need to be filed with the state. Any changes you and your members make to your agreement continue to be private internal business documents, just like the operating agreement itself.
How to Get a Free Operating Agreement
When you hire Best WY Registered Agent to form your LLC, you’ll get a free operating agreement drafted by our Wyoming lawyers. This saves you time and money, and makes LLC ownership go a whole lot smoother. Take a look at some other advantages to using our service:
- Address Privacy- use our registered agent address, instead of your own, on public state record
- Expert Filing Service- hire us to form your LLC on your behalf, spend your time running your business
- Wyoming Business Presence Package- own your business domain, make a secure website, and create up to 10 business email addresses featuring your business domain (+business phone number) for no money down. Get your LLC up and running with the state and online, all under one roof!
- FREE Operating Agreement- store it in your protected client portal, access it 24/7
- FREE Forms Library- download and submit any state filing on your own, complete with instructions
- FREE Access to Wyoming Business Experts- call us with all your Wyoming business questions, we’ll help you find what you need
When you couple a Wyoming LLC’s enhanced privacy laws with the state’s strong liability protections, it’s easy to see why Wyoming is such a great place for businesses. Let’s work together to give your business the best beginning and the support it deserves.
FAQ Section
Need more information? Check out the questions and answers below. Give us a call during regular business hours if you have more questions at (307) 655-7303. Our local Wyoming experts can get you pointed in the right direction.
Can I write my own operating agreement?
Yes, you can! It’s not something we recommend unless you have a lot of experience writing legal documents like this. There is a lot of information available on the internet, so if you’re willing to take the time and do the research, you can write an operating agreement on your own.
Is my operating agreement filed with the state?
No, the state of Wyoming (and all the other states) does not ask to see your operating agreement or require it to be filed with the Secretary of State. It is a private internal business document, which means you keep it somewhere safe and only show it to those who need to see it (like banks, other members, your lawyer, etc.).
Where should operating agreements be kept?
Since you don’t have to file your operating agreement with the state, it’s best if you securely file it away with the rest of your LLC’s business records. If a dispute, legal issue, or business opportunity like a partnership or merger arises, you may need to produce your operating agreement and any amendments.
Does my operating agreement need to be notarized?
As a rule, no it does not need to be notarized. However, you may be asked to produce a notarized copy by banks or for legal reasons. It’s really an “as needed” requirement. Many banks have their own notary public on staff, so if you ever need a copy of your operating agreement notarized, ask your bank if they provide this service for free!
Are LLC operating agreements legally binding?
Yes, operating agreements are legally binding as long as all who sign it are over 18 years of age and were not coerced into signing it against their will. Even if you hand write your operating agreement on picnic napkins, it is legally binding for those who sign it.
What if I lose my operating agreement?
If you lose track of your original operating agreement, don’t panic! Most states (including Wyoming) do not require you to have an operating agreement, so you may just need to write a new one and have all members sign it again. The newer operating agreement will override the older one, even if you wind up finding it later.
Check with other members of your LLC and see if they have a copy of the original. If you are in a legal disagreement with the other members, you will need to ask your lawyer to subpoena a copy from those other members.
You can also check in with the bank where you opened the business bank account. They may have a copy on file from when you first started your business, though it may not include any amendments that were made since (if any).