Essential Clauses for a Single-Member LLC Operating Agreement

A single-member limited liability company (LLC) is a business structure that is owned and operated by a single individual. While it may seem straightforward, a single-member LLC still requires an operating agreement to outline the company's governance and operations. In this article, we'll explore the essential clauses to include in a single-member LLC operating agreement.

• Business Purpose:** Define the purpose of the LLC and what it will do.
• Ownership Structure:** Clearly outline the ownership structure, including the member's ownership percentage and any restrictions on transferability.
• Management:** Establish who will manage the LLC and how decisions will be made.
• Capital Contributions:** Specify how the member will contribute to the LLC, including the amount and type of capital.
• Distributions:** Outline how profits and losses will be distributed among the members.
• Transfer of Ownership:** Establish the process for transferring ownership of the LLC, including any restrictions or requirements.
• Dispute Resolution:** Set forth a process for resolving disputes among the members.
• Amendments:** Outline the process for amending the operating agreement.
• Termination:** Establish the circumstances under which the LLC can be terminated.

By including these essential clauses in your single-member LLC operating agreement, you can ensure that your business is properly governed and protected.