Your operating agreement is the guiding legal document establishing the rules and procedures for your Utah LLC. The operating agreement is a binding legal contract between LLC members, and it determines how your LLC will handle key issues, including voting, transferring membership interest, allocating profits and losses, and dissolving the business. You can use one of our attorney-drafted templates to fill out, save, and download your operating agreement for free.
Since a Utah operating agreement is an internal document, you don’t need to file it with the Division of Corporations & Commercial Code. However, having a strong written operating agreement is essential. Since we know that creating an operating agreement can be daunting, Northwest offers free, attorney-drafted operating agreement templates that can be customized to your Utah LLC’s needs.
Your operating agreement should lay out the “big-picture” plan for your Utah LLC. Your operating agreement can include almost any topic, as long as it isn’t prohibited by Utah state laws. However, there are a few topics that every operating agreement should cover:
Provisions that cannot be included in a Utah LLC operating agreement are listed in UT Code § 48-3a-112 (2019).
Want to focus on your business and leave the legal hullabaloo to us? Our lawyers drafted a comprehensive operating agreement you can use for free. You can even fill it out on this page, save it in a free account for later, and download a completed draft to sign.
In order to fill out our free operating agreement template, you’ll need your:
This must be your business’ legal entity name, or the name you put on your LLC Articles of Organization.
Did an LLC member contribute $500? $5k? A storefront? Put that here.
You’ll just write in 16 here since our version has a set amount of pages.
Remember, this is an internal document, so you won’t have to submit these names to the state just because they’re on here. However, you might need to add these people to your BOI Report.
Include any initial contributions, even if it’s only a small percentage.
While we recommend having a business bank account, some banks like to actually see the operating agreement before you open the account. If that’s the case, you can leave this blank for now.
This is the place your business operates from.
You can add this in later if you aren’t sure when your meeting will be held.
There’s a few different spots where you’ll need to add at least one members’ signature. These are on pages 13, 14, 15, and 16 on our template.
A Utah LLC should have an operating agreement because a company cannot act for itself. In order to operate, LLCs require real humans (and other entities) to carry out company operations.
Utah state law does not require LLCs to adopt a written operating agreement. However, any good lawyer will recommend that you create a written operating agreement as one of the first actions of starting your Utah LLC.
Utah allows you to protect your privacy when starting an LLC by not requiring that you list members’ or managers’ names on the Utah Certificate of Organization or annual renewal. However, this can make it difficult to prove who owns the LLC, which you may need to do in order to open a business bank account. This is when an operating agreement is useful. Most banks will accept an operating agreement as proof that you own your LLC.
To maintain limited liability status, you must be able to show that your LLC is a separate legal entity from its owners. Following the rules and procedures outlined in your operating agreement helps you to demonstrate this legal separation. A well-written operating agreement will be a great tool to have if your LLC is ever served with a lawsuit.
LLC members are unlikely to see eye-to-eye on every single issue. But by referring back to what you’ve already agreed upon in the operating agreement, you can head off conflicts and get back on the same page.
Any processes not covered in your operating agreement will be governed by Utah’s default LLC statutes. These statutes might not be best suited for your business. An operating agreement will give you more freedom in how you run your LLC.
We asked our lawyers for an example of how an operating agreement can make or break your LLC. Here’s what they said.*
“Consider the case of Sumsion v Bay Harbor Farm LC, where the members’ disorganization, including their failure to actually adopt and maintain an operating agreement, opened the door to extensive and expensive litigation. Besides experiencing failure to launch as originally intended, the LLC operations faltered, followed by some members experiencing friction. One member attempted to dissolve the LLC but failed to conclude and wind up LLC affairs. Instead, the member continued to operate under the LLC’s name until a third party was injured, resulting in exposure of the LLC disorganization.
“The Sumsion case is an excellent example as to why it is important to plan ahead, discuss potential pain points, and distill the collective understanding into a written operating agreement. Valuable resources could have been preserved had the members of the LLC taken the time to do that very thing.”
Our operating agreements have been drafted by an attorney, and you can use them for free. Find the one that mostly closely matches your LLC type.