Should I have Operating Agreement for Solo LLC?

[Nick Wehrley]

Hey BP

I have separate LLCs for my properties. Do I need to have an operating agreement per LLC even though they are solo? How important are operating agreements in a solo LLC?

[Jason Marino]

Hi Nick,

Despite the variation of opinions on this in the posts above, you should have an Operating Agreement for any LLC created. As stated, this adds legitimacy to the entity and created distance between yourself and it. Without it, the entity has no formal corporate governance. Additionally, as mentioned, you need to plan for contingencies such as you passing away, you being incapacitated, or you adding a partner. Having an LLC without an Operating Agreement is just having a shell of the entity but not the entire thing.