Utah LLC Operating Agreement
Your Utah LLC operating agreement establishes the rules and procedures for your LLC. This legal document is written by the members of the LLC and governs how the business will handle important issues, such as the company’s voting processes, transferring membership, and dissolving the company.
The state of Utah does not require LLCs to file their operating agreement with the Division of Corporations and Commercial Code. Instead, it is an internal document for your LLC. A good operating agreement is especially helpful for LLCs with multiple members. This document will lay out company procedures specific to certain circumstances (like what to do if a member dies) and can help your Utah LLC navigate future conflict more easily.
FREE Utah LLC Operating Agreement Template
Use our Utah LLC Operating Agreement Template for FREE! All you have to do is use our online tool below to start filling out our attorney-drafted template. If you’re unable to complete your operating agreement in one sitting, no sweat! We’ll save your progress and you can come back when you’re ready to finish the form. When you’re done, you’ll be able to download and print your document.
This single-member operating agreement is free to use. Need a multi-member or manager-managed agreement? Hire us to form your Utah LLC! We’ll provide an operating agreement that matches your management selections.
Plus, you’ll get a private client account where you have 24/7 access not only to your LLC’s operating agreement, but your registered agent details, documents, invoices, forms, and other important business documents.
What Should Be Included In Your Utah LLC Operating Agreement
Unfortunately, the state of Utah doesn’t provide an exact list of operating agreement requirements for businesses. While this might make the prospect of writing an operating agreement seem more daunting, it does provide flexibility for you to include as much or as little information as you wish. However, there are a few important areas you’ll need to address:
LLC Members
One of the most important things an operating agreement does is establish company ownership. Here, you will include the full legal name and address of each member. This is incredibly important, especially when it comes to potential legal matters where membership may be questioned.
It’s also a good idea to include:
- Each member’s ownership percentage and what they contributed to gain that percentage.
- The rights and duties of each member.
- Who is authorized to enter into contracts or open bank accounts and lines of credit for the LLC.
- How profits and losses are shared.
Management Structure
When you formed your Utah LLC with the state, you indicated on your Articles of Organization if your LLC was member-managed or manager-managed. Your LLC’s operating agreement should do the same, but in more detail.
Unlike corporations, which are required to elect officers in certain positions and maintain a board of directors, LLCs are more flexible when it comes to assigning administrative roles. For example, your LLC may not have a president, and that’s okay. Or one member may act as both the secretary and the treasurer. This is also okay if all members agree and include this information in the operating agreement. The most important thing is that each member’s responsibilities are clearly assigned.
It’s also a good idea to include policies for management change, hiring new managers, terminating existing managers, and the correct procedures for when there is a conflict of interest within the company.
Buying In and Selling Out
Your Utah LLC operating agreement should include how members can leave the company and how new members are accepted. The specific procedures for buying-in or selling-out can be determined by the LLC’s founding members, but it’s important to establish these procedures early on in the operating agreement so that going forward everyone understands exactly how company procedure works.
For example, you’ll probably want to establish how a current member can sell-out. Do they need to offer their percentage of ownership to current members before selling it to someone outside the company? Do the current members need to vote to approve this sale? Does the manager of the LLC have a say? There is no established “right” or “wrong” way to do these procedures, but all of the LLC members must be in agreement.
Amendments
Again, an LLC as a business structure is a little more flexible than a corporation, and you and the other members can decide on the specifics on how your operating agreement can be amended. Members can change the operating agreement at any time, but the process for suggesting and implementing an amendment should be detailed in the operating agreement itself.
While writing your operating agreement, you’ll want to consider who is allowed to propose an amendment, how a new amendment should be proposed to the other members, and how many votes are required to approve the change.
Dissolution
Very few folks form an LLC with the intention of dissolving it, but it’s still important to lay out the process for dissolution in your operating agreement just in case. Consider: Are there any specific events that would trigger your LLC’s dissolution? How many member votes would be needed to dissolve your Utah LLC? If you wish, you can even go as far as scheduling your LLC’s dissolution for a specific date.
Utah LLC Operating Agreement FAQs
Can I write my own Utah LLC operating agreement?
Yes. If you’re willing to put in the time and do some meticulous research, you can write your own LLC operating agreement. Writing an operating agreement may be a little less complicated than writing corporate bylaws, but there is still a lot to consider in order to cover your bases. You are not required by the state to submit your operating agreement or to hire a lawyer to review it, but we highly recommend that you do. Your LLC’s operating agreement is a legal document that can be used in court should a dispute within the company escalate to that point.
There are plenty of other companies out there that can provide you with a solid operating agreement, but why go through all that trouble when you can use our attorney-drafted LLC Operating Agreement Template for FREE? Use our free tool above to create your own Utah LLC operating agreement. We’ll automatically save your progress so that you can work on it in your own time. When you’re done, you can easily download print out the completed document.
Do I need to file my UT LLC operating agreement with the state?
No. Utah does not require LLCs to file their operating agreement with the state. This doesn’t necessarily mean you shouldn’t have one. In fact, in the absence of an operating agreement your LLC will be governed by the Utah Revised Uniform Limited Liability Company Act.
Another thing to consider is that sometimes outside entities may ask to see your operating agreement. For example, most banks require an operating agreement in order to open a business bank account.
How do I change my Utah LLC operating agreement?
You will need to follow the procedures for amendments laid out in the operating agreement itself. This procedure usually includes proposing an amendment that the members of the LLC will vote on, and the required number of votes to enact the change.
Is my LLC operating agreement legally binding?
Yes. As long as your UT LLC operating agreement is in compliance with state and federal law, the document is an enforceable, legal contract between the LLC’s members (and sometimes managers).
What if I lose my UT LLC operating agreement?
If you lose your LLC’s operating agreement, you’ll want to reach out to the other members and see if they can provide you a copy. You can also check with the bank that holds your business bank accounts, as you were probably required to provide an operating agreement in order to open them in the first place. If you need the lost operating agreement to help settle an in-company dispute, your lawyer can also subpoena the LLC members to get a copy.
If you still are unable to track down your LLC’s operating agreement, you will want to create a new one as soon as possible to avoid complicating potential disputes in the future. Keep in mind that after the new operating agreement is accepted by the other members, it will replace the original agreement.
Better yet, hire us to form your Utah LLC and we’ll keep a copy of your operating agreement in your client account where you’ll be able to access your documents 24/7.