Agreements / Contracts Attorney in Indianapolis, Indiana
Do I need an operating agreement for my LLC or business?
Do I need an operating agreement for my LLC or business?
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absolutely under any law you don’t have
to have an operating agreement if you’re
a single member entity however you need
an operating agreement an operating
agreement does a lot of benefits for you
it
strictly allows you to decide who owns
what who’s in charge of what and what
percentage you know what percentage
interest people have what their roles
are and how the company operates if you
don’t have one you’re going to default
to the Indiana statutory rules which one
are subject to change but also let’s say
one of you is an investor and one of you
is not well if you don’t have an
operating agreement the law is going to
treat you as equal owners of that entity
rather than a a mix of what maybe some
have a majority interest versus a
minority interest so an operating
agreement is going to tell you all that
it’s going to really lay out how the
business should is owned how it’s
operated and how it’s managed now the
other thing that’s very very important
for it is for estate planning purposes
we can utilize it for different um tax
treatment for different interests we can
utilize it for different gifting
purposes for how that business interest
is transitioned to heirs or to others
that you want to to go to without having
to deal with that outside of the entity
um we can also make sure that if we want
to put that in trust we have those
provisions included within the operating
agreement that allow that to happen for
estate planning purposes the last thing
is it really helps with disputes uh
because it sets out how the business is
expected to run from the get-go rather
than dealing with the dispute when it
comes up and saying “Oh I wish we had
something that told us what to do.” This
document is laid out and through our
experience having dealt with problems is
laid out to handle all of those issues
or at least be able to address on on the
high level of how to address each of one
of those disputes
Indianapolis, IN business attorney Ben Spandau talks about operating agreements for your LLC or business. He explains that under the law, a single-member entity is not required to have an operating agreement. However, having one provides significant benefits. An operating agreement clearly defines ownership interests, management roles, decision-making authority, and operational procedures. Without it, the entity defaults to state statutory rules—such as those in Indiana—which are subject to change and may not reflect the actual intentions of the owners. For example, without an agreement, investors and non-investors may be treated as equal owners, regardless of differing contributions or interests.
An operating agreement also plays an important role in estate planning. It can establish tax treatments for various ownership interests, outline gifting strategies, and facilitate the transfer of business interests to heirs or trusts. By including specific provisions, it ensures smoother transitions without requiring actions outside the entity structure.
Additionally, operating agreements are critical in preventing and resolving disputes. By setting expectations for how the business is to be owned, managed, and operated from the outset, they minimize uncertainty and provide a framework for addressing conflicts before they escalate. This proactive structure gives business owners clarity and protection in both daily operations and long-term planning.
