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Washington LLC Operating Agreement Template

Written by:

Natalie is a business writer with experience in operations, HR, and training & development within the software, healthcare, and financial services sectors.

Edited by:

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.

Washington LLC Operating Agreement Template

In Washington, 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 Washington 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 Washington 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 Washington LLC’s Operating Agreement Include?

The operating agreement should clearly define:

  1. Name of the LLC: Clearly state the full legal name of the LLC as registered with the Washington Secretary of State.
  2. Purpose of the LLC: Describe the primary business purpose and activities of the LLC.
  3. Duration: Specify the duration of the LLC, whether it is perpetual or has a specific end date.
  4. Principal place of business: Provide the physical address where the LLC’s main office is located.
  5. Registered agent: Identify the registered agent and their contact information for the purpose of receiving legal documents on behalf of the LLC.
  6. Member information: List the names, addresses, and contact information of each member, as well as their percentage interests in the LLC.
  7. Capital contributions: Detail the initial contributions made by each member and any additional contributions required in the future.
  8. Allocation of profits and losses: Describe how the LLC’s profits and losses will be allocated among members, typically in proportion to their ownership interest.
  9. Distributions: Explain the process for distributing profits, losses, and other distributions to members.
  10. Management structure: Define the management structure, whether it is member-managed or manager-managed, and outline the roles and responsibilities of each member or manager.
  11. Voting rights: Detail the voting rights of each member and the required majority for decision-making.
  12. Meetings: Establish rules for holding meetings, including frequency, notice requirements, and quorum rules.
  13. Recordkeeping: Specify the type of records that need to be maintained by the LLC and the member responsible for maintaining them.
  14. Admission of new members: Describe the process for admitting new members, including any necessary approvals and capital contribution requirements.
  15. Withdrawal, resignation, or expulsion of members: Outline the procedures for members to voluntarily withdraw or resign, as well as the process for expelling a member under certain circumstances.
  16. Transfer of membership interest: Detail the process and restrictions on transferring a member’s interest in the LLC, including rights of first refusal and buy-sell provisions.
  17. Dissolution: Specify the events that can trigger the dissolution of the LLC and the process for winding up its affairs.
  18. Dispute resolution: Describe the method for resolving disputes between members, such as mediation, arbitration, or litigation.
  19. Amendments: Detail the process for amending the operating agreement, including the required vote or consent of members.
  20. Governing law: Indicate that the operating agreement will be governed by the laws of Washington State.
  21. Miscellaneous provisions: Include any additional clauses relevant to the LLC’s operation, such as confidentiality, indemnification, and severability.
  22. Signatures: Ensure that each member signs and dates the operating agreement, acknowledging their agreement to its terms.

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 Washington 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.

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. 

Conclusion 

Though not legally required in Washington, 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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Washington LLC Operating Agreement Template