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


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