What Is an Ohio LLC Operating Agreement?
An Ohio LLC operating agreement is a legal document that outlines an LLC’s operating rules and ownership details. This document can inform members of their responsibilities, capital contributions, and voting rights.
Under OH Rev Code § 1706.01(R), an Ohio LLC operating agreement establishes the relationship between members and the entity. Ohio law validates written and oral agreements, but the rules differ depending on the LLC’s structure:
- Multi-member LLCs. Members may enter into a written, oral, or implied agreement.
- Single-member LLCs. The agreement must include a written declaration by the sole member to be legally recognized.
Amending an Ohio LLC Operating Agreement
If you need to change the management structure or another aspect of your agreement, you can amend it. OH Rev Code § 1706.082 requires the consent of all LLC members to make an amendment. However, your operating agreement can outline alternative procedures for amendments.
Does Ohio Require an Operating Agreement for an LLC?
No, you do not have to complete an operating agreement for your Ohio LLC. However, it’s highly recommended, as it covers key elements of your business’s operations.
Without this agreement, your LLC will be subject to the laws of Ohio’s Revised Limited Liability Company Act. While this may work for some businesses, you won’t be able to customize your company’s management structure or other aspects.
Plus, having an LLC operating agreement helps ensure you have proof of LLC ownership. You can present it to banks and other third parties to verify the business’s legitimacy and identify authorized signers.
Once you create your Ohio LLC operating agreement, you do not have to file it with the Ohio Secretary of State. Instead, you can store it internally in your company’s records for easy access. The enforcement of your operating agreement is governed by OH Rev Code § 1706.081.
While the Ohio LLC operating agreement is optional, you must file the LLC articles of organization to form your Ohio LLC.
Duties in an Ohio LLC Operating Agreement
OH Rev Code § 1706.08 contains a “freedom of contract” provision. It says that while certain duties exist by default, LLC members can rewrite almost all of them in their written operating agreement. For example, they can expand, restrict, or eliminate traditional fiduciary duties that a member or manager owes to the company or other members.
An Ohio LLC operating agreement can also state that a member or manager is not liable for breaching the contract or their duties, provided they act in good faith. The contract must not remove the implied covenant of good faith and fair dealing.
Separate Asset Series-Designation by an Ohio LLC Operating Agreement
Under OH Rev Code § 1706.76, an operating agreement creates and enforces the legal separation between different sets (or “series”) of LLC assets. If your operating agreement does not include clear series provisions, company assets may not be protected from liabilities tied to other parts of the company.
Your operating agreement can:
- Create designated series
- Assign assets and obligations to a specific series
- Set unique rules (such as profit-sharing structures) for each series
- Authorize independent operations, including entering into contracts and suing/being sued
Sample Ohio LLC Operating Agreement
View an example of an Ohio LLC operating agreement form to learn how to define your company’s operations. Then, get started with creating your own by using Legal Templates’s guided form. Download the final version in PDF or Word format.
