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


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