What Is a Michigan LLC Operating Agreement?
A Michigan LLC operating agreement is a legal document that details the rules and ownership of your LLC. MI Comp L § 450.4102(r) states that an operating agreement oversees the LLC’s affairs and the conduct of its business. It also includes any provision in the articles of organization pertaining to the LLC’s affairs or the conduct of its business.
This agreement lets you get as detailed as you want when recording the following information about your Michigan LLC:
- Business details (name, principal place of business, etc.)
- Capital contributions
- Profit distribution
- Financial recordkeeping
- Dissolution procedures
- Dispute resolution
- Processes for amending the operating agreement
- Processes for adding new members or removing existing ones
You can also use your LLC operating agreement for Michigan to outline whether the company is manager-managed or member-managed. It will explain the managers’ or members’ duties and how they’re expected to support the company.
A Michigan LLC operating agreement can be for a single-member or multi-member LLC. It is still enforceable even if only one member of a single-member LLC signs it, per MI Comp L § 450.4215.
Does Michigan Require an Operating Agreement for an LLC?
Michigan state law does not require an operating agreement for an LLC. You may operate your company without an agreement, but it’s highly recommended for you to create one.
A Michigan LLC operating agreement ensures that you can decide your LLC’s governance and rules. Without one, your LLC will be governed by the Michigan Limited Liability Company Act. While you’ll still have a legal entity for conducting business, the procedures may not reflect your and other members’ desires.
How to Form an LLC in Michigan
Even though an operating agreement is optional in Michigan, you need to file the articles of organization to establish your LLC.
Considerations for a Michigan LLC Operating Agreement
A Michigan LLC operating agreement outlines the rules and governance for your company. However, if there’s a conflict between it and your articles of organization, the articles take priority (MI Comp L § 450.4214).
If you need to amend your articles, you can refer to the operating agreement. Operating agreements may establish the voting requirements for amending your articles. However, if the agreement doesn’t specify a rule, unanimous member approval is required (MI Comp L § 450.4604).
Once you write your operating agreement, it’s important for members or managers to respect all its terms, but especially those relating to the distribution of money or assets. If a member or manager approves or accepts a distribution that violates the operating agreement, they can be held personally liable (MI Comp L § 450.4308).
Sample Michigan LLC Operating Agreement
View a sample of an LLC operating agreement for Michigan to learn how to structure yours. Then, create your legally binding document by going through Legal Templates’s guided questionnaire. Once you’re done, we’ll generate a printable version that you can download in PDF or Word format.
