What is included in a Georgia LLC Operating Agreement?
Your operating agreement lays out the internal structure of your LLC. While you can include anything that isn’t prohibited by Georgia law, a strong operating agreement will include:
- 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 Georgia LLC operating agreement?
Want to focus on your business and leave the legal stuff 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 Articles 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 Georgia LLC have an operating agreement?
A Georgia 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.
While a Georgia LLC is not legally required to adopt an operating agreement, having a solid operating agreement will work in your LLC’s favor in a variety of situations. Here are some examples:
1. Your operating agreement proves you own your LLC.
Georgia is a great state for starting an LLC if you’re worried about your privacy—the state doesn’t require you to list members’ names or addresses on your Georgia Articles of Organization. However, this can make it tricky to prove to a bank who actually owns your LLC, and you’ll need to do that in order to open a company bank account. Since your operating agreement will have all members’ names and addresses, you can use it as proof that you own your LLC.
2. An operating agreement can help reinforce your limited liability status.
To keep limited liability status, an LLC has to demonstrate legal separation from its owners. Keeping your LLC’s rules, structure, and processes clearly outlined in your operating agreement (and then following it to the letter) helps establish that separation. If you ever need to face a lawsuit, a strong operating agreement could make a huge difference in your case.
3. An operating agreement can help settle disputes between members.
When you’re running a business with a team of people, there are bound to be occasional misunderstandings. By following your operating agreement—the contract you have all agreed upon ahead of time—you can prevent those misunderstandings from becoming intractable conflicts.
4. An operating agreement can override Georgia’s default laws.
Without an operating agreement, your LLC will be governed by Georgia’s default LLC statutes, which might not suit your business. But, according to the Code of Georgia (GA Code § 14-11-1107) Georgia law will give “maximum effect” to the enforceability of operating agreements. So while Georgia doesn’t legally require operating agreements, it does give LLCs a lot of freedom in their ability to enforce operating agreements if they have one—you’ll definitely want to take advantage of this.
Georgia 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 Befekadu v Addis, where the failure to actually adopt and maintain an operating agreement led an individual to mishandle LLC assets and funds. This mishandling, coupled with a lack of transparency and accountability, created disputes among the members resulting in extensive and expensive litigation. Had the members of the LLC taken the time to plan ahead, discuss potential pain points, and distill their collective understanding into an operating agreement, then such valuable resources could have been devoted to more fulfilling commercial purposes.”
FAQs
Georgia state law doesn’t require you to have an operating agreement, but it does give “maximum effect” to freedom of contract, so a strong operating agreement can give you a lot of control over your LLC in this state.
Nope, you do not need to file your operating agreement with the Georgia Secretary of State. The operating agreement is an internal document for you to keep on record.
Yes. It may seem a little strange, but even a single-member LLC will need an operating agreement for things like opening a bank account and reinforcing limited liability. An operating agreement is also necessary for overriding Georgia’s default LLC laws.
*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.