Every Connecticut LLC should have an Operating Agreement, but getting one doesn’t have to be expensive. You can download and customize your own Operating Agreement using our free template below.
Connecticut LLC Operating Agreement (Member-managed)
Connecticut LLC Operating Agreement (Manager-managed)
What is a Connecticut LLC Operating Agreement?
A Connecticut LLC Operating Agreement is a written contract between the LLC Members (LLC owners). It is the LLC’s governing document. This legal document includes detailed information about LLC ownership structure, who owns the company and how the LLC is managed.
Single-Member LLCs and Multi-Member LLCs should draft an Operating Agreement, keep it with their business records, and give a copy to all Members.
What should be included in Limited Liability Company Operating Agreements?
Basic Information
Your Connecticut Operating Agreement will include basic information about your Limited Liability Company. Some of the information will be the same as what is listed in your Connecticut LLC Certificate of Organization. Operating Agreements should include:
- LLC Name
- LLC effective date
- Connecticut Registered Agent (if applicable)
- purpose of your LLC
- duration of your LLC
- and how your LLC will be taxed
Related reading: Is a Registered Agent a Member of an LLC?
LLC Ownership
Your Operating Agreement will list every LLC Member and how much of the Limited Liability Company they each own.
How much of the LLC someone owns is called their “LLC Membership Interest” (aka Ownership Interests).
LLC Membership Interest is most often expressed as a percentage (like 5%, 50%, 100%, etc.).
Initial Capital Contributions (putting money into your LLC)
After your LLC is approved, you should open an LLC bank account and put money into that account.
Each of the LLC Members makes an initial capital contribution. Capital contribution simply means a deposit of money into the LLC bank account.
You will list the initial capital contributions in your LLC’s Operating Agreement.
Pro tip: If you complete your Operating Agreement before you have opened an LLC bank account, just enter the amount the Members plan to deposit. If the amount of your deposit changes, it’s okay to edit your Operating Agreement with the actual amounts later.
- Related article: To learn more about capital contributions, like how much you should contribute, check out LLC Capital Contributions.
Statement about taxes
You will list how your LLC will be taxed in your Operating Agreement. There are four common ways an LLC can be taxed:
- LLC taxed as a Sole Proprietorship
- LLC taxed as a Partnership
- LLC taxed as an S-Corporation
- LLC taxed as a C-Corporation
Voting Rights of LLC Members
The rules of membership voting will be spelled out in your Connecticut LLC’s Operating Agreement.
If you use the Member-managed Operating Agreement, the voting powers are proportionate to the LLC Membership Interest.
If you use the Manager-managed Operating Agreement, the voting powers are also proportionate to the LLC Membership Interest. Then the Members vote to elect a Manager or Managers. The Manager(s) then has authority to make certain decisions on behalf of the LLC (without needing a vote by the Members).
However, certain things, like adding or removing an LLC Member, require a vote of the Members (and the Manager has no say).
Make sure all LLC Members have a copy
Once you finalize your Operating Agreement, make sure all the Members have a copy.
We recommend keeping a copy of the Operating Agreement with your LLC business records.
Operating Agreement FAQs
Is an Operating Agreement required for an LLC in Connecticut?
As per Section 32-243d of the Connecticut LLC Act, an Operating Agreement isn’t required for an LLC in Connecticut.
But while it’s not required in Connecticut to conduct business, we strongly recommend having an Operating Agreement for all Limited Liability Companies.
Additionally, financial institutions (like banks) and other organizations may need to see a copy of this paperwork in order for you to do business with them.
Why should an LLC with only one Member still have an Operating Agreement?
It’s best to have an Operating Agreement, even if you are the sole Member of your Connecticut LLC (a Single-Member LLC).
If you go to court, an Operating Agreement helps prove that your Single-Member LLC is being run as a separate legal entity. And that protects your personal assets.
Does a Multi-Member LLC need an Operating Agreement?
It’s best to have an Operating Agreement, especially for a Multi-Member LLC. This document will spell out ownership percentages, profit distribution, and management responsibilities.
If you go to court, an Operating Agreement helps prove that your Multi-member LLC is being run as a separate legal entity.
Do I have to send my Operating Agreement to the state?
No, you don’t have to send your Operating Agreement to the Connecticut Secretary of State, or any other government agency.
Operating Agreements are “internal documents”. Meaning, the Members just need to keep a copy with their business records.
The Operating Agreement is a legally binding document upon the LLC Members because of the Members’ signatures. It doesn’t need a government stamp of approval.
However, in the future, if your company were involved in a lawsuit or an audit, a court or government agency might ask to see a copy of your Operating Agreement.
Additionally, you may also need to show this document to:
- financial institutions when you open a business bank account
- financial institutions if you apply for a loan for the LLC
- a title company if your LLC is buying real estate
Does my LLC Operating Agreement need to be notarized?
No, your Operating Agreement doesn’t need to be notarized. Each Member just needs to sign it.
Once you (and the other LLC Members, if applicable) sign the Operating Agreement, then it becomes a legal document.
Can I write my own Operating Agreement?
Yes, but we recommend using an Operating Agreement template.
An Operating Agreement is a legal document. You don’t have to hire a lawyer to write one, though. Using a template helps make sure you cover everything you need to.
LLC University® offers free Operating Agreement templates that you can download and customize to write your own LLC Operating Agreement.
While other sites offer Operating Agreement templates, they’re not always fully customizable.
How do you write a simple Operating Agreement?
If you wanted to write a simple Connecticut Operating Agreement without using a template, you could. You’d need to check with the Connecticut LLC Act to make sure it meets all the requirements.
For example, at a minimum, you’d want your Connecticut LLC name, your Registered Agents information, your business purpose, the names of the LLC Members, and information about initial capital contributions.
However, there is a lot more information that is important to document about your LLC.
It’s probably a lot easier to start with an existing template. We have a free Operating Agreement template you can download on this page.
What is the difference between an LLC and an Operating Agreement?
An LLC (Limited Liability Company) is a type of business structure. It’s a legal business entity that you form by filing a document called the Certificate of Organization with the state.
An Operating Agreement is an internal document that governs how your LLC is run. It contains rules about how much of the company each Member of the LLC owns, and other details about management and taxes.
Said another way, the LLC is your legal entity. And the Operating Agreement is a written set of rules for how the LLC will operate.
You could have an LLC without an Operating Agreement (but you shouldn’t). But you can’t have an Operating Agreement without an LLC.
How do I set up an LLC in Connecticut?
Here are the steps to starting an LLC in Connecticut:
- Choose an LLC name and make sure it’s available
- Choose who will be your Connecticut Registered Agent
- File the Connecticut LLC Certificate of Organization
- Complete and sign an LLC Operating Agreement
- Get a Tax ID Number (EIN) from the IRS
- Research business license requirements
- Open an LLC bank account
Next Step: EIN Number for an LLC
Once you have created your LLC Operating Agreement, you can proceed to the next lesson: Connecticut LLC EIN Number.
References
IRS: Paying Yourself
Connecticut LLC Act: Section 32-243d
Connecticut Department of Revenue: Starting a New Business
Matt holds a Bachelor's Degree in business from Drexel University with a concentration in business law. He performs extensive research and analysis to convert state laws into simple instructions anyone can follow to form their LLC - all for free! Read more about Matt Horwitz and LLC University.
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Wow!! you did a Da%m good job on this Sir.
Thank you,
Tay
Why thank you! I’m glad it was helpful :)
Hi, I have a question. Would it be possible to send a link for a member-managed operating agreement?
Hi Laquita, I think you mean Manager-managed Operating Agreement. If so, I just emailed you a copy. Hope that helps.
HI — I love this its very interesting, Thank you for your knowledge. I have a question hopefully you will be able to answer — I found that my family (brother mostly) Added myself and my other 2 brothers to our families LLC — I want to use the default OA rather then the one he put together without any of our knowledge — since my Two brothers and I never signed, and the only time he signed was he claims in 1995, at which time he used my parents POA for their Signatures (which he was not given permission to use the POA for this purpose), My question is — I called the Secretary of State today and asked what makes that OA binding or not binding, they told me it Cannot be binding since ALL member did not sign it — Im hoping this is true. Is it?
It’s true. You can’t be a member of an LLC if you never agreed and signed off on it. Your situation sounds complicated. I recommend hiring a lawyer to sort it out.