DGAA bLAWg

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


Tags

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

Archive