If you are (or have) formed a Virginia limited liability company then you may be wondering what an Operating Agreement is and whether you need one. An Operating Agreement is simply a contract between the owners of a limited liability company and the LLC itself. It is the one LLC document that:
- Identifies the owners of the Virginia LLC
- States how much of the limited liability company each owner owns
- Describes how the LLC will be managed and how decisions will be made
- Discusses how new owners may be admitted to the LLC, and most importantly…
- Describes the process for how an LLC owner may leave the LLC, ideally without causing the dissolution of the LLC.
One of the nice things about starting your business in Virginia is that a Virginia Operating Agreement can be customized to fit your exact situation and tailored to how you want to run your new business.
While the law does not require you to have an Operating Agreement, be aware that if your Virginia LLC does not have an Operating Agreement then the Virginia Code (specifically the Virginia Limited Liability Act) will make all of those decisions for you. And you may not like the result, especially in the situation where an owner wants to leave. So you should consider having an Operating Agreement that puts you in control of what happens with your company.Spread the Word