LLC Operating Agreement – One Owner – Taxed as Disregarded Entity

This document is essential for a limited liability company (LLC).

Why do I need an Operating Agreement for my single-member LLC?

An Operating Agreement is an LLC’s primary governing document.  It covers in some detail how the LLC will conduct its business.  It also outlines the fundamental features of the LLC. Most importantly, it tells the world that the LLC has requisite formality as a business entity.  

One Owner: This model document is intended for an LLC with only one  Member (Owner). For an LLC has two or more Members, this model document will not be a good fit. 

If you intend to own your LLC with a family member or a business partner, that would require a different type of Operating Agreement and multi-member LLC structuring services. Should you need structuring and custom drafting for a multi-member LLC, please contact the office.

Disregarded for Tax Purposes: From a tax perspective, this model document is intended for an LLC with the default tax classification.  In other words, the LLC is taxed as a disregarded entity.  All of a disregarded LLC’s income and expenses are reported on its owner’s individual tax return.  

Tax Note: Keep in mind that an LLC that is taxed as an S corporation or a C corporation would file a separate business tax return. For an LLC that is taxed as an S corporation or a C corporation, this model document will not be a good fit. 

Ownership Note: If you intend to own your LLC with a family member or a business partner, that would require a different type of Operating Agreement and multi-member LLC structuring services. Please contact the office to inquire about this customized service.

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