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


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