Are you considering starting a single-member LLC in Wisconsin? If so, one of the first things you should do is create an operating agreement.
An operating agreement is a legal document that outlines how your LLC will operate, including how decisions will be made, how profits and losses will be distributed, and how the company will be managed. While not required by state law, creating an operating agreement is strongly recommended, as it can prevent misunderstandings and disputes down the road.
Here are some key things to consider when drafting a single-member LLC operating agreement in Wisconsin:
1. Company Information.
The first section of your operating agreement should include basic company information, such as the company name, the date it was formed, and the name and address of the owner.
2. Business Purpose.
You should also outline the purpose of the LLC, which can be as general or specific as you want. This section can also detail any restrictions on the type of business the LLC may engage in.
3. Management Structure.
As a single-member LLC, you are the sole owner and manager of the company. However, you should still include a section in your operating agreement outlining the company`s management structure, such as how decisions will be made and who will handle day-to-day operations.
4. Capital Contributions.
This section details how much money the owner will contribute to the LLC and how that money will be used to fund the company`s operations.
5. Allocation of Profits and Losses.
You should include a section detailing how the LLC`s profits and losses will be allocated, including whether the owner will receive a salary or if profits will be reinvested into the company.
6. Dissolution or Buyout.
It`s important to plan for the possibility that the LLC may dissolve or that the owner may want to sell their share of the business. This section should detail the process for dissolution or buyout and how any remaining assets will be distributed.
By taking the time to draft a comprehensive operating agreement, you can ensure that your single-member LLC is legally sound and that you are prepared for any potential issues that may arise. If you`re not sure where to start, consider working with an attorney or using a trusted online legal service to help you draft an operating agreement that meets your needs.