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


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