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

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

Archive