Operating Agreement LLC Louisiana

A Louisiana Limited Liability Company (LLC) Operating Agreement is an internal governing document that outlines how the business will operate. It defines ownership interests, explains management responsibilities, and establishes the procedures members will follow when making decisions. Some refer to it as a Louisiana Operating Agreement or Louisiana LLC Company Agreement. Regardless of the name used, it functions as the primary internal governance document for the LLC.

Many Louisiana LLC owners create the agreement during the formation process, while others adopt one later as the business grows. The Operating Agreement is not filed with the state and remains part of the company’s internal records.

Is a Louisiana Operating Agreement Required?

Louisiana does not require LLCs to maintain an Operating Agreement. Under the Louisiana Limited Liability Company Law, the agreement may be written or oral. Even though it is optional, a written Operating Agreement is strongly recommended. Without one, the LLC must rely on Louisiana’s statutory default rules, which may not reflect the members intended structure.

Why a Louisiana Operating Agreement Matters

Helps preserve limited liability protection

A written Operating Agreement helps show that the LLC is a separate legal entity. Courts may review internal records when determining whether to uphold limited liability protection, especially for single member LLCs.

Establishes internal procedures

Louisiana’s default rules govern the LLC only when no Operating Agreement exists. A written agreement allows members to set their own rules for voting, distributing profits, managing responsibilities, and resolving disputes.

Required by banks and financial partners

Banks, lenders, accountants, and attorneys often request an Operating Agreement to confirm ownership and verify who has authority to act for the LLC.

Addresses Louisiana’s community property considerations

Louisiana is a community property state. Married members may want to include provisions specifying whether membership interests are community or separate property to avoid future disputes.

Supports the state Annual Report requirement

Louisiana LLCs must file an Annual Report each year to remain in good standing. Assigning responsibility for this filing helps ensure compliance.

Key Provisions to Include in a Louisiana Operating Agreement

Basic Company Details

• LLC name
• Business purpose
• Principal office address
• Duration of the LLC
• Federal tax classification

Louisiana requires LLC names to include Limited Liability Company, LLC, or an accepted abbreviation.

Registered Agent and Office

• Name and Louisiana street address of the registered agent
• Procedures for updating the registered agent
• Filing requirements with the Louisiana Secretary of State

Member Information

• Names and addresses of all members
• Ownership percentages
• Initial capital contributions

Capital Contributions

• Description of contributions made by each member
• Rules for future contributions
• Statement that contributions do not earn interest unless agreed

Management Structure

• Identification of whether the LLC is member managed or manager managed
• Duties and authority of members or managers
• Procedures for appointing or removing managers

Profit and Loss Allocation

• Allocation of profits and losses among members
• Timing and conditions for distributions
• Confirmation that distributions must not impair the LLC’s ability to meet its obligations

Tax Election

• The LLC’s federal tax classification
• Notice that some tax elections require IRS filings

Voting Procedures

• Voting rights of members
• Quorum requirements
• Vote thresholds needed for major and routine decisions

Many Louisiana LLCs follow ownership-percentage voting unless altered by the Operating Agreement.

Transfers of Interest

• Rules for voluntary and involuntary transfers
• Procedures for admitting new members
• Treatment of membership interests in cases of withdrawal, death, or expulsion

Records and Bookkeeping

• Procedures for maintaining financial and operational records
• Assignment of responsibility for Louisiana’s Annual Report filing
• Explanation that failure to file may lead to penalties or administrative dissolution

Compensation

• Rules for compensating members, managers, or officers
• Policies for reimbursement of expenses

Dissolution

• Events that may cause the LLC to dissolve
• Procedures for winding up operations
• Filing of Articles of Dissolution with the Louisiana Secretary of State

Amendments

• Procedures for modifying the Operating Agreement
• Requirement that amendments be approved in writing unless otherwise stated

Management Options for Louisiana LLCs

Member Managed

Members oversee daily business operations and may act on behalf of the LLC. This structure works well for smaller or closely held companies. Voting typically corresponds to ownership percentages unless modified in the agreement.

Manager Managed

Members appoint one or more managers to run day-to-day operations. Managers may be members or nonmembers. Members reserve authority for major decisions while delegating daily tasks to managers.

Creating and Maintaining the Louisiana Operating Agreement

Drafting and Signing

The Operating Agreement becomes effective once adopted by the members. Although Louisiana allows oral agreements, a written version provides clarity and minimizes disputes.

Recordkeeping

The agreement should be kept with the LLC’s permanent records. Louisiana requires annual reports, making organized documentation important for compliance.

Amending the Agreement

Members may amend the Operating Agreement by following the procedures described within the document. If amendments affect state-filed information, updates must be submitted to the Louisiana Secretary of State.