What is included in a Connecticut LLC Operating Agreement?
Technically, your Connecticut operating agreement can include anything not prohibited by Connecticut’s Uniform Limited Liability Company Act. To make sure you’ve got a strong, comprehensive operating agreement, you should include information about:
- Activities of your LLC
- Transfer of membership interest
- Voting rights and decision-making powers
- Initial contributions
- Profits, losses, and distributions
- Management
- Compensation
- Bookkeeping procedures
- Dissolution
What information do I need for Northwest’s free Connecticut LLC operating agreement?
Want to focus on your business and leave the legal work to us? Our lawyers have drafted a comprehensive operating agreement you can use for free. You can even fill it out on this page, save it in a free account for later, and download a completed draft to sign.
In order to fill out our free operating agreement template, you’ll need your:
This must be your business’ legal entity name, or the name you put on your LLC Certificate of Organization.
Did an LLC member contribute $500? $5k? A storefront? Put that here.
You’ll just write in 16 here since our version has a set amount of pages.
Remember, this is an internal document, so you won’t have to submit these names to the state just because they’re on here. However, you might need to add these people to your BOI Report.
Include any initial contributions, even if it’s only a small percentage.
While we recommend having a business bank account, some banks like to actually see the operating agreement before you open the account. If that’s the case, you can leave this blank for now.
This is the place your business operates from.
You can add this in later if you aren’t sure when your meeting will be held.
There are a few spots in our template where you’ll need a signature from one or more members.
Why should a Connecticut LLC have an operating agreement?
A Connecticut LLC should have an operating agreement because a company cannot act for itself. In order to operate, LLCs require real humans (and other entities) to conduct company operations.
Connecticut Law § 34-243d-f describes the powers and limitations of an operating agreement, but doesn’t require LLCs to adopt one. But even if the agreement is technically optional, it’s still a very important document for your business. We recommend putting your operating agreement in writing. Here’s why.
1. Your operating agreement proves you own your LLC.
Your Connecticut Certificate of Organization is only required to list the name of one member. Under those circumstances, only that person would be able to use your Certificate of Organization as proof of ownership. But an operating agreement should include the names of all owners, meaning any member of your LLC can use it to show ownership (which is necessary for certain tasks, like opening a business bank account or renting property).
2. An operating agreement can help reinforce your limited liability status.
To benefit from limited liability status, business owners have to be able to show that their LLC is its own legal entity separate from its owners. One way to do this is to open and use a separate bank account for your business. Another way is to create (and follow) an operating agreement.
3. An operating agreement can help settle disputes between members.
Disagreements and misunderstandings are unavoidable. But an operating agreement gives your business an agreed-upon set of rules and procedures, which can prevent minor misunderstandings from flaring up into big problems down the line.
4. An operating agreement can override Connecticut’s default laws.
Without an operating agreement, your LLC will automatically be governed by Connecticut’s Uniform Limited Liability Company Act. The problem is, Connecticut’s default laws might not be right for your business. Creating an operating agreement allows you to run your LLC in a way that—within the parameters of the law—works for your company.
Connecticut Case Law
We asked our lawyers for an example of how an operating agreement can make or break your LLC. Here’s what they said.*
“Consider the case of Styslinger v Brewster Park, LLC, where a member’s divorce almost resulted in the dissolution of the LLC, contrary to the wishes of the other remaining member. While the statutes and courts were able to ultimately preserve the life and operation of the LLC, statutes and court interpretations can evolve and change, which may not always align with members’ purposes in operating the LLC. To insulate an LLC from litigation and distractions from normal business operations, it is an excellent idea for the members to distill their intent into writing, such as an operating agreement.”
FAQs
No, Connecticut LLCs are not required to have an operating agreement. That said, you’ll need an operating agreement for several important tasks, like opening a bank account and maintaining limited liability.
No. Your operating agreement is an internal document, which means you’ll keep it with your own business files.
Actually, yes. It may seem strange, but even a single-member LLC needs an operating agreement to open a business bank account and show that it’s maintaining limited liability.
*This is informational commentary, not advice. This information is intended strictly for informational purposes and does not constitute legal advice or a substitute for legal counsel. This information is not intended to create, nor does your receipt, viewing, or use of it constitute, an attorney-client relationship. More information is available in our Terms of Service.