Should you have an LLC Operating Agreement in California?

Absolutely. For one, in California, all LLC’s are required under state law to have a Limited Liability Company Operating Agreement (see code 17050).

"(a)In order to form a limited liability company, one or more persons shall execute and file articles of organization with, and on a form prescribed by, the Secretary of State and, either before or after the filing of articles of organization, the members shall have entered into an operating agreement. The person or persons who execute and file the articles of organization may, but need not, be members of the limited liability company..."

Aside from this requirement, consider the following critical issues which can be addressed with a well-written operating agreement:


-Liability Protection: can help prove that the LLC is a separate legal entity.
-Management: Sets forth who manages the entity and outlines duties and responsibilities of managers and members.
-Distributions: Sets forth how profits will be divided among the members of the entity.

-Dissolution: Sets forth the process for dissolving the company and distribution of assets after the dissolution.

Do consider having a proper operating agreement drafted for your LLC either before or after the filing of articles of organization.