Operating Agreements for Nebraska LLCs
All Nebraska LLC owners need to have an operating agreement. This protects the operation of the business. An operating agreement sets expectations and rules for the running of your LLC. Plus, it’s required by the state of Nebraska and helps to establish credibility as a legal entity in the state.
WHAT IS AN OPERATING AGREEMENT?
A Nebraska LLC operating agreement is just a legal document that lays out the structure of ownership and the operating procedures of your LLC. Whether you are starting with multiple members or just one member in your LLC, your operating agreement needs to deal with all of the issues listed below. If you are running a single-member LLC, not all of the topics will directly apply. However, they still need to be included in your operating agreement in order to comply with relevant laws.
The agreement needs to state when your LLC was first officially formed, who the members are, and the division of ownership. For multi-member LLCs, this could be an equal ownership model; alternatively, different members may be given different portions of ownership.
– Management and Voting:
This section lists how the LLC will be managed, as in whether it will be managed directly by the owners or by an appointed manager. It will also discuss how the owners will vote on matters of business. Usually, each owner is given one vote, but this agreement can give some owners more power than others.
– Capital Contributions:
Capital contributions refer to the amount of capital (money) each member has invested. This section also includes plans for raising additional capital in the future.
This discusses how the profits and losses of the business should be divided among the members. Generally, profits are divided equally. If some other method is to be used, it needs to be laid out here.
– Changes in Membership Structure:
The section for membership structure changes should lay out how the roles and ownership will be transferred, should one of the members choose to leave the company. It is absolutely essential that your operating agreement discusses a process for replacing or buying out a member.
If all of the members of the LLC decide to no longer conduct business as an organization, the LLC needs to be officially dissolved. Outlining how the assets and debts of your business will be divided in the hypothetical event of its dissolution is a very important part of your operating agreement.
WHY DO I NEED A NEBRASKA LLC OPERATING AGREEMENT?
Regardless of the kind of Nebraska LLC business you are starting, you’ll need to create operating agreement documents. This is why:
– The state recommends it. According to the Nebraska Revised Statutes, Section 21-102(14), all Nebraska LLCs can adopt some kind of operating agreement (whether it is oral, written, or implied) to manage the affairs of that company.
– It helps to prevent conflict between business partners. When starting a multi-member LLC, having that operating agreement in place prevents misunderstandings among your team. It sets clear expectations and rules about each person’s role and responsibilities.
– The agreement helps to preserve your status as a limited liability company. As the sole owner of a Nebraskan single-member LLC, having an operating agreement helps to ensure its limited liability status holds up in court. It also adds
to your business’ credibility.
But do I need an operating agreement?
Yes, you do. Although this document isn’t filed with the state, having it in place maintains control of your Nebraska LLC even in times of change or chaos.
When should I write my operating agreement?
It’s best to have the operating agreement laid out before filing a Certificate of Organization, but you can wait until the business is formed. However, some banks will require your operating agreement before they will allow you to open a business account.
Do I file my operating agreement officially with the state?
No; these documents are retained by the members of the LLC.