An Illinois multi-member LLC operating agreement is a legal document used by entities with more than one member to establish internal procedures and operational terms for the company. The state of Illinois does not require that this document is completed in order to conduct business within the state. If the members of the business do not, however, choose to implement the document, each member may find that they will be personally liable in the event of litigation or business failure. This would place all member’s personal assets at risk.
Having this document completed and in place will create a separation of the member’s assets from the debts of the company. It also allows for tax benefits that would not be available without the declaration of the document.
How to Write
Step 1 – Download the document – Place the name of the company into the first line of the document
Step 2 – Agreement – Submit the following information:
- The date the document would be effective, in mm/dd/yyyy format
- Provide the names of all members of the company
Step 3 – The Company – Members must read the following titles. Enter all required information:
Formation –
- Submit an effective date indicating the formation of the company, in mm/dd/yyyy format
- Enter the company name
- Provide the name of the company to be used for which business shall be conducted under
Name –
- Submit the name of the company to be used to conduct principal business
- Purpose – Review the statement
Office –
- Provide a required physical address, where the company shall maintain the principal of the business
Registered Agent –
- Submit the full name of the person who has been initially registered as the agent
- Submit the registered office address
Term –
- Provide the date when the company shall commence, in mm/dd/yyyy format
Read the final two titles, as follows:
- Names and Addresses of Members
- Admission of Additional Members
Step 4 – Titled Sections and Subsections – The members must review all of the following: (sections and subsections)
- Capital Contributions (subsections 2.1 through 2.3
- Allocations of Profits and Losses; Distributions (subsections 3.1 through 3.3)
- Indemnification
- Powers and Duties of Managers, Section 5.1 – subsections 5.1.1 through 5.3
- Salaries, Reimbursement, and Payment of Expenses – subsections 6.1 through 6.3
- Books of Account, Accounting Reports, Tax Returns, Fiscal Year, Banking (review subsections 7.1 through 7.4)
- Transfer of Membership Interest – 8.1 and 8.2 and subsections 8.2.1 through 8.2.5 – also, 8.4 and subsection 8.4.1 and 8.5 Death Buy Out (subsections 8.5.1 through 8.5.5)
- Dissolution – Read 9.1 and subsections 9.1.1 through 9.1.4, as well, 9.2 and subsections 9.2.1 through 9.2.3
Step 5 – General Provisions – All members must read all of the information as follows:
- Amendments
- Governing Law
- Entire Agreement; Modification
- Attorney Fees
- Further Effect
- Severability
- Captions
- Notices
Step 6 – Additional Documents, Member’s Signatures, Notarization(s) – Members, must provide signatures to the remaining documentation, only while they are before a Notary Public –
- Print or type the member’s names
- Members must submit their signatures
Listing of Members – Schedule 1 –
- Enter the name of the company in the first line of the page
- Enter a date in which the list has been created, in dd/m/yy format
- Enter the member’s names
- Addresses for each member
- Type or print member’s names
- Members must submit signatures
Listing of Capital Contributions -Schedule 2 –
- Provide the company name at the top of the document
- Submit member’s names
- Submit each member’s contribution (A $100.00 minimum is required, there is no further obligation to offer any future contribution)
- Provide member’s percentage of interest
- Enter the date of the member’s signatures, in dd/m/yy format
- Type or print members names
- Enter member’s signatures
Listing of Valuation of Members Interest – Schedule 3 –
- Provide the name of the company, in the line at the top of the form
- Submit the member’s names
- Enter an amount indicating the member’s Valuation Endorsement
- Enter the date of the member’s signatures, in dd/m/yy format
- Type or print the member’s names
- The members must enter their signatures
Step 7 – Notarization –
- Once all members signatures have been witnessed (and recorded) by the notary public. The notary will complete the section. The notary must then submit their own signature and affix the notary seal.
After the document has been completed, copies must be provided to each individual member for their own safekeeping.