Why Your LLC Needs an Operating Agreement

Web Admin - Tuesday, March 18, 2014

illinois corporate attorney llcsLimited Liability Companies (LLCs) are a form of business structure that allows owners to have some of the benefits of a standard corporation, but with more flexibility to control the particulars of the business. This flexibility makes it important to make thoughtful choices about things like voting rules and members’ rights and responsibilities at the start of the formation process. That is where the LLC operating agreement comes in. While operating agreements are not required by law in Illinois, it is still highly beneficial to have them because of the extra control that they provide.

What is an Operating Agreement?

An operating agreement is a document that controls the structure of the company and the members’ relationships. This can mean many different things, but operating agreements often include provisions related to:

  • - Each member’s percentage of ownership;
  • - Management of the LLC- Member Managed v. Manager Managed;
  • - The rights and responsibilities of the different members;
  • - Voting powers and dispute resolution mechanisms;
  • - Voting and meeting procedures; and
  • - Conditions relating to the sale of the LLC and the members’ related rights.

The Benefits of an Operating Agreement

Given the importance of the types of provisions that operating agreements contain, each LLC should have one, even if it is not technically required by law. The law forgoes this requirement because the legislature drafted a set of default rules to apply to LLCs for cases in which the members decide not to draft an operating agreement. While people often rely on these default rules, that is not the best strategy for their business. The major benefit of the LLC is the freedom and control provided by the operating agreement, so skipping the drafting of the operating agreement defeats the purpose.

This is especially problematic because often times the default rules do not make the most sense for a particular business. For instance, most actions under the default rules require only a simple majority vote of the members to be approved. Drafting an operating agreement would allow the members to introduce supermajority votes and other control provisions on more important issues. Similarly, another central issue to any business is the distribution of profits.

In Illinois, the default rule is that distributions must be made in equal shares to all of the members. This rule seldom makes sense for businesses in which different members have invested different amounts. People often want to tie their distribution to the members’ stakes in the company, which requires a separate provision in the operating agreement. Of course, these are just some of the many choices that operating agreements allow LLC members to make about their business and its structure.

If you are in the process of forming an LLC and need an operating agreement tailored to your business’s specific concerns, contact an Illinois corporate law attorney. We help businesses across the northwest suburbs in towns like Rolling Meadows, Palatine, Schaumburg, and Inverness.

About the Author: Attorney Jay Andrew is founding partner of Drost, Gilbert, Andrew & Apicella, LLC. He is a graduate of the University of Dayton School of Law and has been practicing in estate planning, probate, trust administration, real estate law, residential/commercial leasing, contracts, and civil litigation. Since 2005, Jay has been a Chair of the Mock Trial Committee for the Annual Northwest Suburban Bar Association High School Mock Trial Invitation which serves over 240 local Illinois students each year.

Registered Agents for Business: Why You Need One

Web Admin - Friday, October 18, 2013

In most states, including Illinois, business law requires corporate owners to have a registered agent represent their corporation or limited liability company (LLC). A registered agent is the third-party who is listed in the same state in which the business was established. This go-between is chosen to receive service of process notices, communication from the Secretary of State, tax forms, and lawsuits on behalf of the business.

According to the Illinois Limited Liability Company Act (805 ILCS 180/1-35), a registered agent’s name and location must be included in the paperwork filed with the state. This allows the public to access information about a business and to send any important documents to the agent registered for the company. This is especially useful for small businesses without a physical address. The state must have a physical address on file in case the business is served with a lawsuit.

How Registered Agents Help in Illinois

Not only is a registered agent the third-party representative for a business, but they stand as barrier between a business and the state government. This allows a business owner to focus solely on their corporate front. A registered agent in Illinois will accept tax or legal documents privately so business owners do not have to do so in front of clients.

An additional benefit is that a registered agent’s office address will remain the same even if a business moves to a new location. With a registered agent, there is no need to file more paperwork with the state for every Illinois business relocation. Opening a new business office in another state, however, presents more challenges. Every state requires a business to maintain a registered agent and registered office in that state.

Lawsuits can be complex and have serious consequences for missed deadlines. A registered agent is a qualified professional who knows the laws and regulations for the State of Illinois. Assigning the role of registered agent to a law firm can ensure that service of process is properly received and handled.

If you are interested in appointing a qualified law professional as your registered agent, contact a Palatine corporate law attorney today. Call 847-934-6000 to speak to a business lawyer serving the Northwest Suburban areas including Rolling Meadows, Buffalo Grove, Barrington, and beyond.

Recent Posts


Chicago corporate attorney Illinois driving without license Inverness real estate attorney drug crimes Barrington business law firm construction accidents, personal injury, wrongful death, Arlington Heights personal injury attorneys, workers' compensation Illinois speeding lawyer spinal cord injuries vacation home fines DMV Des Plaines real estate attorney traffic offenses Illinois personal injury attorney small business Long Grove estate planning overtime violations texting while driving employment contract estate planning trusts employee misclassification Des Plaines claims law firm living trust Deer Park personal injury lawyer Illinois pet lawyer Illinois estate planning wills Exclusions traumatic brain injury personal injury pregnant women Long Grove estate planning attorneys Do Not Resuscitate Rolling Meadows personal injury lawyer underinsured motorist installment contracts gift tax exemption, estate planning, estate planning strategies, Illinois estate planning, South Barrington estate planning attorneys golf accidents Inverness DUI lawyer ObamaCare Illinois criminal defense attorney Crystal Lake medical malpractice lawyer Illinois lawyer rent to own real estate contracts life insurance claims probate process Illinois wills and trusts Illinois traffic ticket lawyer sole proprietorship criminal defense Illinois employment attorneys car accident lawyer unpaid assessment Arlington Heights TBI attorney bike accident slip and fall Barrington personal injury attorney insurance dispute real estate lawyer insurance agent negligence Fair Labor Standards Act Rolling Meadows estate planning attorney taxes traffic violations digital information Schaumburg personal injury attorney Illinois workplace discrimination attorney Buffalo Grove criminal defense lawyer pedestrian accidents Long Grove real estate lawyer living trust benefits Buffalo Grove injury lawyer changes to mortgage law Long Grove real estate attorney Des Plaines drug crimes lawyer employment lawyer PTSD Inverness injury lawyer agent personal injury law firm probate fees Illinois medical malpractice attorney Schaumburg Illinois medical malpractice lawyers real estate closing Rolling Meadows employment law attorney POA Crystal lake insurance dispute attorney Food and Drug Administration's Food Safety Modernization Act startup company Chicago attorney Buffalo Grove corporate attorney wrongful termination Crystal Lake business law attorneys Crystal Lake medical malpractice attorneys Schaumburg real estate lawyer Barrington estate planning attorney Illinois probate lawyer Illinois pedestrian accident attorney criminal Crystal Lake estate planning lawyer Schaumburg car accident attorney murder charges Des Plaines collections attorney Rolling Meadows tax attorney Buffalo Grove law firm living trust vs will Palatine law firm Deer Park employment law attorney workplace sexual harassment personal injury claim criminal law personal injury attorney Buffalo Grove insurance claim dispute lawyers Long Grove estate planning attorney traffic crimes defective products blood alcohol content bad faith insurance claims Illinois Workers’ Compensation Commission problem employees Chicago estate planning landlord rollover car crashes Rolling Meadows medical malpractice lawyers filing a medical malpractice claim Des Plaines personal injury lawyer Arlington Heights traffic attorney boating DUI Palatine corporate law attorneys commercial leasing icy parking lots deed transfer Illinois hit and run accident Palatine employment lawyer comparative negligence medical marijuana TBI denied insurance claims Arlington Heights Traffic Lawyer Illinois medical malpractice case drunk driving statistics clemency Rolling Meadows Attorney workers compensation Palatine traffic lawyer Rolling Meadows criminal lawyer Deer Park workers compensation lawyer Arlington Heights medical malpractice lawyer estate planning holiday statistics Illinois insurance attorney condo life insurance policy no contest clauses Illinois tax attorney Illinois employment laws right to work Illinois estate planning attorney Illinois injury lawyer advance healthcare directive wills and trusts uninsured motorist Arlington Heights wills and trusts attorney Rolling Meadows traffic law firm Illinois rollover accident lawyers School Visitation Rights Act hands free device in terrorem provision life insurance social media after death Palatine civil attorney unfunded trust Rolling Meadows DUI lawyer license suspension Inverness probate lawyer Schaumburg estate planning lawyer Schaumburg Attorney vacation home comp time Jay Andrew estate planning lawyer Transfer on Death Instrument premises liability Palatine drug lawyer Des Plaines motorcycle accident attorney Arlington Heights personal injury lawyer head on collisions institutional trustee defective products lawyer Barrington employment attorney Illinois DUI attorney distracted driving accidents Rolling Meadows car accident lawyers Barrington drug crime attorney nursing home negligence Barrington employment law attorney Chicago car accident lawyer Inverness civil lawyer breach of contract commercial leases Arlington Heights lawyer insurance attorney trucking accidents Schaumburg employment attorney Illinois real estate lawyer Self-Directed IRA Accounts wrongful termination, employment law, whistleblower protections, Illinois employment laws, discrimination in the workplace Palatine Attorney license revocation brain injury severance agreements Deer Park traffic accident attorney Arlington Heights personal injury attorney Des Plaines injury law firm Arlington Heights pedestrian accidents underage DUI pay when paid contract workers comp real estate zoning Barrington employment law firm Schaumburg criminal law attorney drunk driving Crystal Lake personal injury lawyer Rolling Meadows employment attorney digital assets DUI Schaumburg drug defense lawyer estate planning, digital assets, Revised Uniform Fiduciary Access to Digital Assets Act, Illinois digital assets, Illinois estate planning, digital evidence Chicago insurance law firm Arlington Heights employment attorney capital gains tax Illinois trucking safety preventing accidents Deer Park real estate law firm Mount Prospect elder law attorney Kenilworth estate planning attorneys Inverness real estate lawyer Crystal Lake car accident attorney Arlington Heights criminal lawyer caregiver overtime pay Des Plaines criminal attorney involuntary manslaughter jet ski accidents Arlington Heights wills and trusts attorneys denied insurance claim Palatine corporate attorney Inverness traffic law firm disability benefits swimming pools traffic accidents marijuana crimes attorney Barrington medical malpractice lawyers Arlington Heights injury attorney Palatine workers compensation lawyer Des Plaines accident attorney Chicago insurance claim attorneys Deer Park traffic lawyer bicycle dooring accidents Barrington workers compensation attorney car crash injuries Des Plaines real estate lawyer residential real estate Des Plaines tax law firm Palatine employment law lawyer privacy laws Schaumburg criminal attorney Illinois attorney murder defense whistleblower protections anesthesia errors Forcible Entry Palatine employment attorney probate claims process natural gas explosion Palatine trusts lawyer Illinois living will cell phone accidents workers compensation benefits Crystal Lake car accident lawyer car collision Illinois workers compensation lawyer motorcycle accident BAIID Des Plaines pet law attorney Rolling Meadows accident lawyer mortgage Rolling Meadows Deer Park criminal attorney trench injuries estate tax Illinois employee rights attorney. Chicago biking tips minimum wage job lawyers Palatine real estate lawyer food poisoning Inverness estate planning lawyer employment contract, employment law, employment at-will, Deer Park employment law attorneys, contract, insurance negligence Illinois insurance claim dispute lawyer Barrington injury attorney estate planning, death tax, succession plans, business estate plans, Barrington estate planning lawyers automated cars Crystal Lake traffic lawyer drug possession Illinois traffic attorney Rolling Meadows insurance lawyer dog bites Illinois registered agent LLCs medication errors Arlington Heights insurance attorney insurance disputes texting and driving loss of consortium Illinois employment law attorneys financial advisors denial of life insurance car accidents insurance denial appeals Des Plaines drug lawyer civil rights violation construction contracts special needs trust distracted driving accident victims real estate contract Crystal Lake employment attorney insurance claim pedestrian accident Retaliatory Discharge license sexual images Rolling Meadows business lawyer medical malpractice compensation Palatine personal injury lawyer Schaumburg personal injury lawyer Illinois corporate lawyer Crystal Lake pet attorney Rolling Meadows real estate attorney Inverness elder law lawyer products liability Illinois Smoke Detector Act Palatine estate planning lawyer new real estate form Crystal Lake employment law attorney Illinois insurance claim attorney bicycle accidents Buffalo Grove probate lawyer Barrington Illinois estate planning lawyer Illinois employment lawyer Kenilworth estate planning attorney Illinois motorcycle accident lawyer Illinois trusts attorney Des Plaines personal injury lawyers Chicago lawyer Rolling Meadows drug defense attorney IRS Arlington Heights car accident lawyer suspended license mass shooting Rolling Meadows probate lawyer Illinois Human Rights Act car crashes Arlington Heights estate planning attorney Palatine civil litigation lawyer dynasty trusts manufacturing personal injury lawyer revenge porn guardianship attorney fault based insurance motorcycle accident lawyer Illinois workplace lawyer insurance claim denial Palatine probate lawyer slip and fall accidents Schaumburg injury lawyer insurance disputes, Illinois insurance disputes, Illinois insurance dispute attorneys, denied insurance claims, Arlington Heights insurance dispute attorneys Barrington Traffic Lawyer deadly crashes driving Schaumburg construction accident lawyer Arlington Heights real estate lawyer life insurance lawyer medical malpractice, missed diagnosis, delayed diagnosis, medical mistake, Deer Creek medical malpractice lawyers pet bites Affordable Care Act Barrington real estate lawyer product liability Crystal Lake traffic attorney real estate field sobriety test IRELA commercial real estate employment law Illinois insurance claim dispute lawyers Illinois Wage Payment and Collection Act Fourth of July insurance claims Barrington boating accident attorney Schaumburg employment law attorneys rollover accidents natural gas loopholes controlled substance hiring employees Illinois business law atorneys DGAA appealing an insurance claim Illinois civil litigation lawyer preventable medical errors Chicago will attorney, social media platforms, Illinois estate planning lawyer, Buffalo Grove traffic attorney DUI attorney Riverwoods estate planning lawyer liability claims Crystal Lake law firm employment attorney Buffalo Grove personal injury attorney attorney fees IRA trust transfer Illinois bicycle safety insurance denials condo association Illinois employment law Liquor Control Act spinal cord injury Buffalo Grove personal injury lawyer Barrington civil litigation attorney Policy Cancellation internet Schaumburg probate attorney unauthorized overtime Rolling Meadows litigation lawyer Arlington Heights wills and trusts lawyers Illinois elder law attorney Crystal Lake accident attorney fatal car accidents first degree murder construction accidents reckless homicide Schaumburg personal injury lawyers personal injury accidents trust payments FMLA Rolling Meadows insurance attorney Des Plaines Traffic Lawyer Crystal Lake personal injury attorney child safety Crystal Lake civil litigation lawyer digital assets, digital fiduciary, estate planning, digital content, Long Grove estate planning lawyers owner responsibility Mount Prospect real estate lawyer Des Plaines medical malpractice attorney pedestrian injuries, pedestrian fatality Schaumburg civil litigation attorney Joliet general practice lawyers consent to a search DUI defense estate planning for college students Illinois law civil litigation attorney fiduciary rule delay criminal record federal crimes trucking accident lawyers Illinois red light cameras civil litigation Illinois business lawyer Schaumburg estate planning attorney estate plan dram shop law foreclosure Buffalo Grove traffic lawyers Illinois insurance disputes paid sick leave foreclosed rental property Illinois car accident attorney Home Remodeling Repair Act Chicago traffic lawyer Palatine business attorney Schaumburg traffic lawyer Colin H. Gilbert traffic deaths pedestrian-automobile accident Illinois traffic accident lawyer subcontractor insurance agents Rolling Meadows personal injury lawyers Illinois employment law firm Schaumburg insurance lawyers back injuries Arlington Heights car crash attorneys personal injury claims Attorney Ken Apicella Illinois personal injury irrevocable trust digital media accounts, estate planning, Arlington Heights estate planning attorney, jet ski murder insurance dispute attorney Palatine injury attorney Chicago estate planning lawyer Illinois small business Arlington Heights employment law attorneys employment law, meal breaks, rest breaks, hotel employees, Des Plaines employment law attorneys employee rights traffic violations defense insurance adjusters operating agreements Barrington criminal defense lawyer wrongful death corporate law Illinois Sales Representative Act Mt Prospect Attorney health insurance dispute caretaker rights traffic tickets estate attorney forming a corporation in Illinois truck collisions Rolling Meadows boating crash lawyer college kids modern family estate planning Rolling Meadows corporate lawyer Legal Info homestead rights Schaumburg medical malpractice lawyer Illinois traffic laws Illinois wrongful termination lawyer Palatine construction attorney surgical mistakes Rolling Meadows Traffic Lawyer Illinois insurance dispute lawyers Thanksgiving traumatic brain injuries Rolling Meadows marijuana attorney Rolling Meadows employment law attorneys Palatine criminal defense lawyer Crystal Lake will lawyer boating under the influence traffic laws Deer Park DUI lawyer Des Plaines civil attorney crossover accidents creditors cell phone Des Plaines personal injury attorney rumble strips Rolling Meadows criminal attorney employees real estate attorneys Deer Park motorcycle accident lawyer drugs Rolling Meadows traffic attorney Inverness corporate attorney pain and suffering Illinois workers compensation attorney Barrington estate planning lawyer Schaumburg estate attorney Palatine punch death DNR Chicago employment lawyer auto accidents Family Medical Leave Act healthcare Illinois boating accident lawyer Arlington Heights tax lawyer Crystal Lake medical malpractice law firm power of attorney for healthcare Chicago trucking accident attorney medical research Crystal Lake pedestrian accident lawyer business litigation boating accidents medical malpractice claims trauma after an accident Crystal Lake employment lawyer senior citizens Crystal Lake bike accident lawyer Mount Prospect wills and trusts lawyers Buffalo Grove real estate attorney Rolling Meadows personal injury attorney Schaumburg elder law lawyer living wills power of attorney Schaumburg corporate attorney Buffalo Grove employment lawyer Illinois mortgages Crystal Lake insurance lawyer Home Sale Contingencies Illinois employment law attorney car accident Deer Park accident attorney Illinois construction accident attorney Barrington personal injury lawyer landlord tenant law Illinois will lawyer Illinois Transfer on Death Instrument tax attorney insurance claim dispute attorney Illinois job attorney investment property accidental death benefits Des Plaines insurance attorney Buffalo Grove medical malpractice lawyers Buffalo Grove car accident lawyer Des Plaines Arlington Heights accident attorney medical malpractice ken apicella Illinois real estate Rolling Meadows insurance dispute lawyers, insurance dispute expungement pizza emoji Super Mario Federal Food Drug and Cosmetic Act Whistleblower Claims Deer Park medical malpractice attorney low-ball insurance settlement work unions personal injury, auto accident injuries, delayed injuries, serious injuries, Des Plaines personal injury attorneys BUI insurance claim dispute Illinois insurance claims lawyers estate planning attorney employee discrimination FSLA federal regulations for LLCs gift taxes real estate attorney Illinois personal injury lawyer Detainer Actions Kenilworth estate planning lawyer real estate leasing Arlington Heights Attorney blended families underfunded trust Long Grove wills and trusts attorneys ACA Landlord Tenant Ordinance Illinois wills and trusts attorneys meal breaks Illinois Probate Act of 1975 home inspection lawyer sexual harassment Employment Discrimination Law Arlington Heights wills and trusts lawyer Des Plaines DUI attorney eluding a police officer pet law Inverness insurance attorney wage theft Barrington attorney probate Barrington criminal lawyer Rolling Meadows insurance dispute lawyers South Barrington real estate lawyer fiduciary rule drug crimes lawyer car crash trustee probate lawyer Class A misdemeanor Illinois defective products attorney Palatine elder law attorney probate claims license reinstatement income distribution deducation Chicago will attorney independent contractor dealing with problem employees GM ignition switches Arlington Heights trucking lawyer Crystal Lake injury attorney contracts breathalyzer test rest breaks llinois Real Estate Lawyers Association Colin Gilbert compensatory time Crystal Lake tax lawyer BAC elder law Illinois home inspection privacy Palatine insurance lawyer DUI penalities CAM insurance dispute, insurance dispute lawyers, insurance claim denial, insurance claim delays, Rolling Meadows insurance dispute attorneys car accident lawyers cell phone tower data Illinois personal injury lawyers speeding insurance claim denials healthcare claims insurance claim delay unpaid overtime Illinois jet ski accident lawyer Schaumburg wrongful death attorney Chicago employment attorney Inverness personal injury attorney Inverness accident lawyer liability Illinois insurance lawyer South Barrington real estate attorney Illinois medical malpractice claim Illinois traffic attorneys IRA benefits trusts drug crime elder abuse Crystal Lake criminal defense attorney Barrington litigation attorney marijuana employment law, Illinois employment laws liens Palatine traffic accidents Illinois LLC creation Illinois collections attorney Illinois estate planning law firm