Can You Amend Your LLC Operating Agreement?
An LLC operating agreement is usually prepared when the LLC opens and can be amended. It governs the structure and operations of the LLC.
If LLC members approve a change and the LLC follows required procedures, the operating agreement can be amended by the members. Review your existing operating agreement to make sure you are following the specific rules for your LLC.
In many cases, your LLC operating agreement will specify the number or percentage of members who must agree to an amendment. If your operating agreement does not include this provision, the law providing for such amendments in your state governs. Most states require members to unanimously agree to this requirement.
How to Amend Your Operating Agreement?
You can amend your LLC's operating agreement by following these steps once you are familiar with the requirements for amending the agreement.
1. Draft the proposed amendment and hold a vote.
First, draft the amendment to your LLC operating agreement in a separate document and attach it to the original operating agreement. Alternatively, you may present a rewritten operating agreement for merely minor amendments. This way you can keep track of all the changes made.
Then present the draft amendment to the other LLC members for their vote. You must comply with all relevant procedural rules from the LLC's current operating agreement or state law.
2. Memorialize the vote and file the appropriate documents.
The majority of members who support the amendment should sign a resolution memorializing the decision, and also include whether the vote and agreement occurred at an LLC meeting.
Ensure that a copy of the amended document is retained in your LLC records. You should indicate the date it took effect so that future confusion cannot arise as to which version of the operating agreement is in effect.
The amended operating agreement does not need to be filed with the state business authority. However, certain amendments that need to be filed might require that you amend the articles of incorporation, for example. Exact requirements vary by state.
You should consult your small business lawyer for assistance with understanding or drafting the rules for amending your operating agreement. In addition, you may want to consult your attorney to revise your agreement and ensure its validity.
As always consult an attorney before amending your operating agreement.