Whether you’re a seasoned entrepreneur or a first-time business owner, forming an LLC in Montana can be an excellent choice for variousreasons ...
Montana LLC Operating Agreement Template
Written by: Carolyn Young
Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.
Edited by: David Lepeska
David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.
Updated on May 7, 2023
Montana LLC Operating Agreement Template
In Montana, your limited liability company (LLC) is not required to have an operating agreement in place. But it’s highly recommended, as an effective operating agreement can help avoid disputes and lawsuits that could threaten the stability of your LLC.
What is an LLC Operating Agreement?
A Montana LLC operating agreement is an important legal document that details who owns the business and provides essential information pertaining to member duties. An LLC operating agreement establishes the financial relationship between members and the basics of the working relationships between those members and the managers who oversee daily operations.
The operating agreement is not filed with the state, but instead remains private. It’s advisable to hire an attorney to ensure your operating agreement is thorough and legally binding.
We’ve provided two operating agreement templates for your use. One is for a single-member LLC if you are the sole member, and the other is for a multi-member LLC if your LLC has two or more members. The documents are customizable and should be adjusted for Montana state and your business. These documents are for your internal use and are not filed with any governing body.
Download FREE Operating Agreement Templates
Disclaimer: These documents may need to be adjusted based on your circumstances and may not cover all situations. Your document also may need to be adjusted over time as your business evolves. These documents should not be considered legal advice. You should have your version of the document reviewed by your attorney to make sure that all necessary provisions are included to fit your business situation.
What Should Your Montana LLC’s Operating Agreement Include?
Here are some key elements that should be included in a Montana LLC’s Operating Agreement:
- Organization: Detail the formation of the LLC, including the date of filing the Articles of Organization with the Montana Secretary of State.
- Business purpose: Describe the nature and purpose of the LLC’s business activities.
- Duration: Indicate the duration of the LLC, which could be perpetual or for a specific period.
- Registered agent and office: Identify the registered agent and the registered office’s address in Montana.
- Membership: List the names and addresses of all members and their initial capital contributions, as well as the percentage of ownership interest for each member.
- Management structure: Specify whether the LLC will be managed by its members or by designated managers. Include provisions outlining the powers, duties, and limitations of managers, as well as the procedures for appointing and removing them. If the LLC has a board of directors, the operating agreement will also include the role and responsibilities of the board members and how they are compensated.
- Voting rights: Detail the voting rights of members, including voting thresholds for making decisions and any supermajority or unanimous voting requirements.
- Distributions: Explain how profits and losses will be allocated among the members and the process for making distributions.
- Meetings: Describe the procedures for conducting meetings of members and managers, including notice requirements, quorum, and voting rules.
- Admission of new members: Set out the process for admitting new members, including any approval requirements and capital contributions.
- Withdrawal, death, or expulsion of members: Define the procedures for handling the withdrawal, death, or expulsion of members, and how their ownership interest will be dealt with.
- Dissolution and winding up: Outline the process for dissolving the LLC and distributing its assets to members after all debts and obligations have been settled.
- Amendments: Specify the procedures for amending the Operating Agreement, including any required notice and voting thresholds.
- Dispute resolution: Include provisions for resolving disputes among members or between members and the LLC, such as mediation or arbitration.
- Governing law: State that Montana law will govern the interpretation and enforcement of the Operating Agreement.
An LLC operating agreement provides legal and financial recourse for a number of situations. If conflicts arise between LLC owners pertaining to any of the above issues, the operating agreement will provide clarity.
The specific language of the operating agreement lays out exactly how such conflicts will be resolved, how the business is structured, the dynamics of operations, and more.
Though Montana has default rules on the books that address some of the issues that might arise between LLC members, your LLC operating agreement would override these default laws and give you greater control.
It’s important to consult with an attorney or an experienced professional to tailor the agreement to your specific needs and ensure compliance with Montana law.
How Much Does an Operating Agreement Cost?
Creating an operating agreement is free if you just draw it up yourself. Alternatively, you can pay for guidance from an online business advisory like ZenBusiness.
This is an extremely important document, so it’s recommended that you hire a professional service or law firm. If you choose to use an attorney to help you create this document, the price will be around $500 for a single-member LLC and $2,500 for a multi-member LLC.
Who Needs my LLC Operating Agreement?
One of the key reasons to have an operating agreement in place is that it makes your LLC more appealing to financial backers. Banks are likely to request to see your operating agreement when you apply for a loan. If you seek funding from investors, they will also want to see your operating agreement.
Though not legally required in Montana, an operating agreement is a crucial document for LLC operations, ensuring your company is able to access adequate financing and settle any disputes. Keep in mind, you do not need to file your operating agreement with any state body. You simply need to take certain steps to ensure it’s legally binding and keep it in your records.
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