Create Your Free LLC Operating Agreement Amendment
Build your selected document.
Answer a few simple questions with step-by-step instructions.
Print & download forms instantly. Sign & make it legal.
Sometimes, the terms of an LLC stop reflecting the best interests or wishes of its members. In this situation, the members could either dissolve the LLC and start anew or amend the original document with an LLC Operating Agreement Amendment.
Unless the original terms are completely unsuited to further business, dissolving the LLC is not recommended. It results in far more work than is necessary to rectify an issue that isn't an existential threat to the LLC.
The option of changing the terms of the LLC through an amendment is usually preferable. It saves you the time and hassle of replacing the entire original agreement if you want to retain most of the original provisions.
An LLC Operating Agreement Amendment is a document that establishes the rights and responsibilities of the owners of an LLC. It describes how the LLC makes decisions and distributes profits.
However, it is not a standalone document. It's a written document that identifies which sections of an already-signed operating agreement will be modified and in what way. By drafting an LLC Operating Agreement Amendment, LLC members don't need to file new articles of organization or jeopardize the business.
Not every LLC agreement can be amended with an LLC Operating Agreement Amendment. The original agreement should say if it can be modified and list any limitations on future amendments. Amendments that contradict restrictions on the original contract are not legally enforceable.
Depending on your state, an LLC Operating Agreement may also be known as:
LLC Operating Addendum
Partnership Agreement Amendment
Articles of Organization Amendment
Partnership Amendment
You will need an LLC Operating Agreement Amendment whenever two or more partners decide to make changes to an established LLC Operating Agreement. Those may be any individuals or legal persons who are partners in a Limited Liability Company.
Cases in which you would use an LLC Operating Agreement Amendment include:
Accepting a new LLC member
Removing an existing partner from the LLC
Changing the distribution of profits and losses
Adjusting capital contributions
Modifying management practices
Create your own documents by answering our easy-to-understand questionnaires to get exactly what you need out of your LLC Operating Agreement Amendment.
Each document on 360 Legal Forms is customized for your state.
All you have to do is fill out a simple questionnaire, print, and sign. No printer? No worries. You and other parties can even sign online.
With our form generator and extensive library of attorney-vetted legal documents, 360 Legal Forms can help you create a customized LLC Operating Agreement Amendment. All you have to do is fill out our easy-to-understand questionnaire. Once complete, simply download your form as a PDF or Word document from your secure online account.
To create your document, please provide:
Effective Date: The date when the changes go into effect.
LLC Details: All the relevant LLC information from the original agreement, including the LLC's name, governing state, and date of formation.
Member Information: The full names and addresses of all current members of the LLC. If you are amending to remove a member, that member's name should still be listed here.
Amendments: All the changes you are making to the original LLC Operating Agreement. This typically includes the section name and number of the provision in the original agreement that's being amended.
Capital Contributions: Money or assets that members of a partnership give to the business.
Fiscal Year: A one-year period that an organization uses to report financial information. May have different start and end dates than a calendar year.
Permitted Businesses: A contract clause outlining what profit-generating activities the LLC can and cannot take part in as agreed by the members.
Units: Represent ownership share in the LLC for each member. The number of units is determined in the original operating agreement, and each member gets a number of units that equals their share of the LLC.
Disregarded Entity: A business entity ignored for taxation because it has a single owner. In other words, the entity is not treated separately from the owner for tax purposes.
To be valid, an LLC Operating Agreement Amendment needs to be signed by all members and managers who signed the original operating agreement as well as any new members entering the partnership. You may choose to notarize the signatures, but this isn't required for the amendment to be legally enforceable.
Once the members have signed all copies of the LLC Operating Agreement Amendment, a designated representative should attach a copy to the original operating agreement and file it in the LLC's principal place of business. Each member of the LLC should retain a signed copy of the LLC Operating Agreement Amendment for their records.
If the LLC filed articles of organization with the governing state, check with a state or local attorney to see if the amendment needs filing as well. A lawyer can also tell you if any amendments will result in a change of EIN or other substantive SEC changes and filings.
An amendment is used when the parties need to make revisions, deletions, and additions to the original operating agreement. An addendum is used when the parties only need to make an addition to the original agreement.
Generally, an LLC operating agreement amendment does not need to be notarized. You only need to sign the document to make it legally enforceable. A witness may be helpful if anyone ever attempts to contest the document, but a notary is not strictly necessary.
That said, the use of a notary ensures that no one challenges any signatures later and is a secure way to establish the effectiveness of your document.
If your goal is to maintain the LLC, a non-contentious process that all parties can agree upon is preferable. Mediation focuses on finding a compromise in which all parties feel satisfied with the outcome. Mediation and arbitration are typically far less expensive than going through the courts, especially for minor amendments.
Most business decisions are resolved by a majority vote from the members of the LLC. But an operating agreement can make a sharp distinction between decisions made as a matter of course and decisions that significantly impact the members. Decisions that bear a greater impact on members' interests may need a supermajority or a unanimous decision to provide more protection for each partner.
In most cases, adding a new member will dilute the current members' ownership stakes as the new member will be entitled to a percentage of units. However, that's not always the case. The new member's share of interest in the LLC will be proportional to their capital contributions. A new member may make the LLC proportionally larger, increasing the value of the other members' units.
Use an LLC Operating Agreement Amendment whenever you make changes to the original LLC Operating Agreement. Some situations require changes so extensive as to merit a complete dissolution of the LLC, or members may not be able to agree on changes in a way required by the original agreement. However, these situations are rare, and most additions and modifications can be handled with an amendment.
