What is a West Virginia LLC operating agreement?
An operating agreement is a regulatory document for a West Virginia LLC which outlines the governing structure and operating guidelines of the entity along with the responsibilities of the members.
An operating agreement may also be referred to as a membership agreement.
Is an operating agreement required in West Virginia?
West Virginia Statutes, § 31B-1-103, state that every West Virginia LLC may adopt an operating agreement, but it isn’t required by the Secretary of State. Despite it not being required, there are several reasons it is recommended to have one.
Currently, only six states require an LLC to have an operating agreement – California, Delaware, Maine, Missouri, Nebraska, and New York.
Related – When does an LLC need an Operating Agreement?
Why is an operating agreement important?
There are a number of reasons why the operating agreement is important. A few of which include:
- In the event of a legal dispute, an LLC without an operating agreement may have to follow generic state rules which may not be advantageous to the company or its members.
- The roles, responsibilities and expectations of the members are in writing which will reduce future conflicts.
- As a single-member LLC, having an operating agreement may help to better protect the entity’s limited liability status.
- When applying for financing, a lender will often want to see one to ensure the members have the authority to borrow on behalf of the entity.
- Potential investors and partners will request one when evaluating a business.
What should be included in an operating agreement?
An operating agreement can be as structured or unstructured as the members deem necessary. Some elements to consider putting in an operating agreement include:
- Business information such as the name of the LLC, principal office address, purpose of the business, duration of the LLC, etc.
- Name and address of the registered agent
- Capital contributions of the members
- Management – member-managed vs member-managed
- Scope of the manager’s authority
- Entity tax election
- Roles of the members (including financial authority, signing contracts, etc)
- Names of the members and their percentage of ownership
- When and how members receive compensation and distributions
- Meeting information and voting rights
- Procedures for adding or removing a member
- Process of dissolving the LLC
Where is an operating agreement filed?
The operating agreement isn’t filed with the state. A signed copy should be kept where the company records are stored in addition to each LLC member having one as well.
West Virginia LLC Operating Agreement Template
Below we have a downloadable West Virginia LLC operating agreement template in both Word and PDF formats. Please note this is a general template and has not been reviewed by an attorney. It is recommended that you have it reviewed by an attorney before using.
To get a legally reviewed operating agreement, check out the 7 day free trial from LawDepot, RocketLawyer or eForms. These companies walk you through the operating agreement step-by-step, asking questions relevant to your state and business to ensure an agreement that best protects your business. Plus, you are able to get access to their entire library of custom forms, contracts and documents at no extra charge.