A Limited Liability Company (LLC) is a separate legal entity that can conduct business just like a corporation with many of the advantages of a partnership. It is taxed as a partnership. Its owners are called members and receive income from the LLC just as a partner would. There is no tax on the LLC entity itself. The members are not personally liable for the debts and obligations of the entity like partners would be. Basically, an LLC combines the tax advantages of a partnership with the limited liability feature of a corporation.
An LLC is formed by filing articles of organization with the secretary of state in the same type manner that articles of incorporation are filed. The articles must contain the name, purpose, duration, registered agent, and principle office of the LLC. The name of the LLC must contain the words Limited Liability Company or LLC. An LLC is a separate legal entity like a corporation.
Management of an LLC is vested in its members. An operating agreement is executed by the members and operates much the same way a partnership agreement operates. Profits and losses are shared according to the terms of the operating agreement.
Montana Operating Agreement for States who have Adopted the Uniform Limited Liability Act and the Revised Uniform Limited Liability Act In Montana, the Operating Agreement is a crucial legal document that governs the operations and internal management of limited liability companies (LCS). This agreement is specifically designed for LCS located in states that have adopted the Uniform Limited Liability Act (UCLA) and the Revised Uniform Limited Liability Act (SULLA), including Montana. The Operating Agreement plays a significant role in establishing the rights, responsibilities, and relationships among LLC members, as well as outlining the company's policies and procedures. There are different types of Montana Operating Agreements available for LCS operating under the UCLA and SULLA: 1. Single-Member Operating Agreement: This type of agreement is specifically designed for LCS with a single owner or member. It outlines how the LLC will be managed, the owner's rights and responsibilities, and procedures for admitting additional members in the future, if desired. 2. Multi-Member Operating Agreement: When an LLC has multiple members, this type of agreement is required. It sets out the roles, rights, and obligations of each member, procedures for decision-making, profit distribution plans, dispute resolution mechanisms, and rules for admitting new members or removing existing ones. It is important to tailor this type of agreement to the specific needs and requirements of the LLC. 3. Manager-Managed Operating Agreement: In some LCS, members may choose to appoint a manager or a group of managers to handle the day-to-day operations. This type of operating agreement outlines the authority and responsibilities of the manager(s), as well as the rights and obligations of the members. 4. Member-Managed Operating Agreement: This is the most common type of operating agreement for LCS. It establishes that all members are actively involved in the day-to-day operations, decision-making, and management of the company. It outlines the collective responsibilities and authority of the members and facilitates effective communication and decision-making within the LLC. Some essential components that should be included in any Montana Operating Agreement under the UCLA and SULLA include: 1. Entity Name and Purpose: Clearly state the name of the LLC and define its purpose or nature of its business activities. 2. Membership Details: Provide a detailed list of all members, their ownership percentages, and their contributions to the LLC. 3. Capital Contributions: Outline the initial capital contributions made by each member and specify the process for future contributions. 4. Management Structure: Determine whether the LLC will be managed by its members or appointed managers and describe the responsibilities and duties of each role. 5. Voting and Decision-Making: Establish the procedures for making decisions, such as voting thresholds and methods, and the frequency of meetings. 6. Profit and Loss Distribution: Determine how the LLC's profits and losses will be shared among the members, considering their ownership percentages and contributions. 7. Withdrawal and Transfer of Membership Interest: Specify the conditions and procedures for members to withdraw or transfer their ownership interests. 8. Dissolution and Liquidation: Outline the process for dissolving the LLC, distributing remaining assets, and handling debts and liabilities. 9. Dispute Resolution: Establish mechanisms for resolving conflicts and disputes among members, such as mediation or arbitration procedures. It is important to consult an experienced attorney or legal professional when drafting a Montana Operating Agreement to ensure compliance with the specific requirements of the UCLA and SULLA, as well as any additional state-specific regulations. A customized and well-drafted Operating Agreement can provide clarity, minimize disputes, protect individual rights, and promote the successful operation of an LLC in Montana.
