What Is a Montana LLC Operating Agreement?
A Montana LLC operating agreement lets you set the rules for how your LLC will operate. It allows you to decide on various matters, including the following:
- How business decisions are made
- How member votes are weighed
- How much of the LLC each member owns
- Whether the LLC is managed by members or managers
- How to dissolve the business if needed
In Montana, you may use an operating agreement for single-member and multi-member LLCs. In either structure, an operating agreement overrides the state’s default rules where allowed.
Is an Operating Agreement Required for a Montana LLC?
No, an operating agreement is not required for a Montana LLC. It remains a private document stored internally at your LLC’s place of business. You never file it with the Montana Secretary of State.
Even though this document isn’t necessary for your LLC’s operations, it’s highly recommended that you have one. A Montana LLC operating agreement makes it clear that your business is a distinct entity, separate from your personal assets. This proves the business’s credibility, which is important when interacting with banks and credit unions.
Plus, it establishes your business direction and drives growth by clarifying operations. Furthermore, you get access to limited liability protection, which is especially important for single-member LLCs.
Forming an LLC in Montana
Form an LLC successfully in Montana by filling out and filing the articles of organization with the Secretary of State.
Legal Considerations for Montana LLC Operating Agreements
A Montana LLC operating agreement offers a lot of flexibility when you’re setting up your LLC’s rules. Read about the applicable rules and statutes so that you can create an enforceable contract that complies with state law.
- Oral operating agreements are recognized. Montana recognizes verbal agreements, so you don’t have to get yours in writing. However, it requires a written contract to change recordkeeping rules, distribution rights, and member admission procedures (MT Code § 35-8-109).
- You may not use your operating agreement to perform certain actions. A Montana operating agreement cannot be used to eliminate the duty of loyalty or unreasonably restrict a member’s right to access records (MT Code § 35-8-109).
- Overrule default profit distribution rules. Montana LLCs, per MT Code § 35-8-503, distribute profits and losses equally among members. However, you may state a different distribution method in your operating agreement.
- Alter voting power. If you want a voting system other than Montana’s one-vote-per-capita, you may outline it in your operating agreement (MT Code § 35-8-307(1)).
- Prevent standstills in approval for certain decisions. MT Code § 35-8-307(3) requires unanimous consent from all members to sell the company’s property, amend the contract, and perform other actions. You can use your operating agreement to remove the requirement for unanimous consent, expediting certain actions.
Sample Montana LLC Operating Agreement
View our sample Montana LLC operating agreement template to see how you can detail members’ roles and responsibilities within the company. Complete Legal Templates’s guided form to generate a custom document, then download it in PDF or Word format. From there, you’ll distribute it to your LLC’s members and any institutions that request a copy so they can conduct business with your LLC.
