A Michigan single-member LLC operating agreement is an essential document for LLCs owned by a single person. It outlines the company’s internal operations and purpose while providing terms for various legal and financial issues, such as the owner’s duties, personal assets, tax treatment, etc.
Creating an operating agreement is highly recommended as it helps protect the owner’s personal assets from company debt and litigation. Without this agreement, the state’s default laws would govern the company’s actions, potentially creating unwanted consequences in certain situations, such as the owner’s incapacitation or death. The agreement also establishes the LLC and provides proof of ownership, business purpose, and liability limitation for the single member.
