What Is a Louisiana LLC Operating Agreement?
A Louisiana LLC operating agreement is an internal document that lets you record your custom rules for your LLC’s operational and governance procedures. Members use it to define how their LLC functions day-to-day. Without this agreement, LLCs are subject to the state’s default laws governing LLCs, Louisiana Revised Statutes Title 12, Chapter 22 (§§ 12:1301-1369).
Some changes you can make to your LLC with an operating agreement include the following:
- Membership structure. LLCs are member-managed by default (LA Rev Stat § 12:1311). The articles of organization must state otherwise. If you decide to make your LLC manager-managed, your operating agreement can define the manager’s rights and limitations.
- Dissolution. Without an operating agreement, dissolution occurs at the expiration of the term, at the consent of members, or by a court order (LA Rev Stat § 12:1334). If you want to override these triggering events in order of priority, you can record your own dissolution procedures in your operating agreement.
- Elimination of certain liabilities. LA Rev Stat § 12:1315 permits an operating agreement to eliminate or limit the personal liability of members and managers for monetary damages. By writing your own terms, you can ensure that members aren’t personally liable for legal fees or judgments if the LLC is sued. However, they will still be liable if they commit an intentional crime.
- Voting rights. LA Rev Stat § 12:1318 states that each member has one vote regardless of their contributions. You can update this rule with your operating agreement as you see fit.
- Member departure. LA Rev Stat § 12:1325 explains that if you form an LLC for a specific term, a member cannot withdraw without just cause. If the LLC has no term, a member can usually leave with 30 days’ notice. You can update this provision in your operating agreement to prevent a key partner from leaving with their capital at an inconvenient time.
- Right of assignee to become a member. LA Rev Stat § 12:1332 requires unanimous consent to let an assignee gain voting rights. You can write your operating agreement to lower this requirement to a simple majority.
Is a Single-Member LLC Operating Agreement in Louisiana Valid?
Yes, LA Rev Stat § 12:1301(16)supports having an LLC operating agreement for a single-member or multi-member LLC in Louisiana. While it may seem unnecessary to enter a contract with yourself if you’re the sole member, it actually provides a lot of protection. A single-member LLC operating agreement in Louisiana maintains the corporate veil. Creditors won’t be able to pursue your personal assets to make up for any debts that your LLC incurs. Plus, by writing your custom rules, you can conduct your LLC how you see fit.
Does Louisiana Require an Operating Agreement for an LLC?
An LLC operating agreement is not required, but it’s a valuable internal document to keep in your company’s records. Financial institutions may only agree to open a business bank account or issue a loan if you can show them a signed Louisiana LLC operating agreement. Plus, it reinforces limited liability protection and lets you run your LLC according to your desired terms.
How to Form an LLC in Louisiana
You don’t need an operating agreement to form an LLC in Louisiana, but you must complete the articles of organization. Once you fill it out, you must file it with the Louisiana Secretary of State’s Commercial Division to officially register your LLC.
Sample Louisiana LLC Operating Agreement
View an example of our Louisiana LLC operating agreement to see how to customize it with your unique terms for management, profit and loss allocation, and more. Fill it out using Legal Templates’s guided form, then download it in PDF or Word format. Distribute copies to all LLC members and keep one copy in your company’s records for easy reference.
