A Colorado single-member LLC operating agreement establishes the operational framework for a limited liability company with a sole owner. This agreement outlines the company’s purpose, member’s rights and responsibilities, capital contributions, and profit distribution. While not legally mandated by the state, having this agreement in place is highly recommended as it helps clarify the internal workings of the business and mitigates potential conflicts.
In addition to standard provisions, it may include specific clauses addressing succession planning in case of the member’s incapacity or death or procedures for admitting new members should the owner decide to expand the company. Furthermore, the agreement can outline how the LLC will be taxed, either as a disregarded entity or as a corporation.
