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LLC Docs Information
Hello BP community,
Seeking clarification if possible in regards to the internal documents held within an LLC. I've been speaking with my CPA (who obviously isn't a lawyer) & my compliance coach from the business who set up my first LLC. Also spoke with the state of CA office in regards to this. Everybody seems to have their own interpretation.
I went through the e-file process for a new LLC in CA. Within 2 days was approved and received my Articles of Organization. My first thought was, are they going to give me the Operating Agreement [OA] and other supporting docs (I had received a huge binder of these docs thought the company I used to register my first LLC). Quickly, I learned that the [OA] and other supporting docs are not to be turned into the state, but are to be kept internally. The [OA] and supporting docs I received through the company who set it up, were very extensive, had great detail, etc. When I filed the 2nd one with the state of CA, I saw how the Articles were straight-forward and one page. Different from the 1st I had filed with the company. So my question then was, does the [OA] need to be extensive as well? Or can it be simply one page? Since it is kept internally. My CPA said yeah, the [OA] can be however long you wish. The company who set up my first LLC, included additional documents like certificates for members, minutes information, etc. Is all of this necessary? Could I essentially take the documents from the first LLC, change the entity names and then use that for any new LLC? The compliance coach that was given to me through the company for the 1st LLC I filed with, says that all these documents are important to have in case if I were to get sued, a judge will see that the LLC was operating like a proper LLC, rather than a individual who simply registered a LLC form with the state. How much truth does this actually hold?
I would be thankful for any input and experience with this if you have the time to share. My thinking process right now is that I don't want to fork over all that money to this company (or another) to prepare these documents if there is not much need for it because they are kept internally and not even submitted to the state. Does it really give a upper hand advantage (having these documents) if there were to be a worse case scenario and someone wanted to sue me?
I was able to successfully register my 2nd LLC with the CA, as mentioned, and was re-directed by them to file the LLC-12 which will state all the members. Essentially, that is all that is needed correct? The rest of the documents like Operating Agreement, is whatever the members of the LLCs agree upon, correct? The "minutes" "membership certificates" etc are all optional docs?
Thank you.
Most Popular Reply
The state only requires the articles and the statement of information. The rest of the documents are for internal purposes. I am not your attorney but I wouldn't recommend cutting corners. You should have an operating agreement and make sure it contains all the provisions required. The whole point of setting up your LLC is to protect you from liability... when someone sues you it will cost you way more to fix it than if you did it right the first time. You want the operating agreement and other documents so that your LLC is a legitimate business and the corporate veil is not pierced. Having those other documents bolster the fact that your LLC is in fact a business rather than just the 2 short forms on file with the state. Again, I'm not your attorney so you should seek out legal counsel, but generally... you get what you pay for...
*this post does not create an attorney client or cpa client relationship. Readers are advised to seek professional advice.