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New Hampshire LLC Operating Agreement

Your New Hampshire LLC operating agreement is a legal document that establishes rules for how your LLC will handle procedures like voting, allocating profits and losses, management, and even—should it ever come to this—dissolution.

An operating agreement is an internal document, but that doesn’t make it any less important than documents filed with the state. In fact, adopting a strong operating agreement is essential. That’s why we at Northwest offer a range of free, attorney-drafted New Hampshire operating agreement templates to help suit your business needs.

Why should a New Hampshire LLC have an operating agreement?

A New Hampshire 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 carry out company operations.

New Hampshire’s LLC Statutes cover the groundwork for operating agreements, but they don’t explicitly state you must have an one. However, you will need an operating agreement to maintain your LLC. Here’s why:

1. Your operating agreement proves you own your LLC.

When filing your New Hampshire Certificate of Formation, you don’t have to include the names of any members of your LLC. While this is great for maintaining privacy, it doesn’t help you show proof of ownership. This is where your operating agreement comes into play.

Because your operating agreement includes the names of all members, you can use it to show that you own your business. This is necessary for important tasks like opening a bank account and renting office space—both banks and landlords will ask to see proof of ownership.

2. An operating agreement can help reinforce your limited liability status.

To benefit from limited liability status, business owners must show that their LLC is its own legal entity separate from its members. One way to do this is to open a separate bank account for your LLC. Another way is to create (and follow) an operating agreement.

3. An operating agreement can help head off misunderstandings.

Misunderstandings are probably inevitable in any business. But with an operating agreement to establish agreed-upon rules and procedures for your LLC, you can help prevent minor issues from developing into major problems.

4. An operating agreement can override New Hampshire’s default laws.

If you don’t have an operating agreement, your LLC will automatically be governed by New Hampshire’s LLC statutes. The problem is that those default laws might not fit your company. By writing your own operating agreement, you ensure that you’re able to run your LLC in a way that suits your business.

New Hampshire 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 McDonough v McDonough, where a dispute among the members (who were all brothers) led to litigation where one member sought to force the dissolution of the LLC over the objections of the other two members. To the credit of the one member, the LLC’s Articles of Organization did state a date certain for dissolution. The Supreme Court of New Hampshire, however, pointed to the statutes and the operating agreement as providing options to the LLC members to ignore the termination date listed in the Articles and to continue the LLC’s operations.

The McDonough case is an excellent example of why it is important to adopt and maintain an operating agreement. Had the members failed to do so, the courts would have likely ordered dissolution of the company over the objections of a majority of the LLC members. For these reasons (and more), a reasonably prudent business owner would (and should) adopt and maintain an operating agreement.”

What is included in a New Hampshire operating agreement?

According to NH Rev Stat § 304-C:40 (2019), an operating agreement can be “written, oral or implied.” But a spoken agreement is flimsy and won’t hold up in court. A written operating agreement is essential, and should include information about:

  • Transfer of membership interest
  • Voting rights and decision-making powers
  • Initial contributions
  • Profits, losses, and distributions
  • Management
  • Compensation
  • Bookkeeping procedures
  • Dissolution

New Hampshire LLC Operating Agreement Template

Northwest offers a range of free, New Hampshire-specific operating agreement templates that have been drafted by an attorney. Choose the one that best fits your LLC management structure.

FAQs

Is an operating agreement required in New Hampshire?

No, New Hampshire statutes don’t explicitly require LLCs to have operating agreements. However, you’ll need an operating agreement for several important tasks, including opening a business bank account.

Do I have to file my operating agreement in New Hampshire?

No. Your operating agreement is an internal document and should be kept on file with your own LLC records.

Does a single-member LLC need an operating agreement?

Yes. Though it may seem strange to adopt an agreement you’ve made with yourself, even a single-member LLC needs an operating agreement for important tasks, like opening a bank account and—perhaps most importantly—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.

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