Operating Agreement LLC Minnesota

A Limited Liability Company formed in Minnesota is governed by state law. After filing Articles of Organization with the Minnesota Secretary of State, internal business operations are controlled by an Operating Agreement.

What Is a Minnesota LLC Operating Agreement

A Minnesota LLC Operating Agreement is a written contract between the Members. It outlines ownership structure, management rules, operational procedures, and provisions related to dissolution and indemnification. All decisions made by governors, managers, and Members must comply with the Operating Agreement, the Articles of Organization, and applicable law.

Is an Operating Agreement Required in Minnesota

Minnesota law does not require an LLC to adopt an Operating Agreement. Section 322C.110 of the Minnesota LLC Act confirms that the document is optional. Financial institutions may still request one. A written agreement helps maintain limited liability protection for single member LLCs. For multi member LLCs, it documents ownership percentages, management responsibilities, internal procedures, and profit distribution.

Key Components to Include

An Operating Agreement should reflect the LLC’s specific circumstances. Many companies use a template as a starting point. Key items include:

• Basic Information LLC name, effective date, purpose, duration, taxation method, and Registered Agent if needed.
• LLC Ownership List of all Members and their membership interests, usually expressed as percentages.
• Initial Capital Contributions Amount contributed by each Member.
• Tax Classification How the LLC will be taxed, such as sole proprietorship, partnership, S corporation, or C corporation. Minnesota is not a community property state, so Qualified Joint Venture status is not available.
• Voting Rights Voting rules and whether the LLC is member managed or manager managed. Voting power usually follows membership interest.

Management Structures

Minnesota LLCs may choose one of two structures. In a member managed LLC, all Members may bind the LLC and handle daily operations. In a manager managed LLC, designated Managers run daily operations and may bind the LLC. Members vote on major issues but do not manage daily affairs.

Filing and Documentation

The Operating Agreement is an internal record and is not filed with the Minnesota Secretary of State or any other agency. There is no filing fee. The agreement becomes effective once signed by the Members. Notarization is not required. A signed copy should be kept with business records because a court, agency, or financial institution may request it.

Governing Law and Modification

The Operating Agreement is interpreted under Minnesota law and the Minnesota Revised Uniform Limited Liability Company Act, Chapter 322C. Members may allow the agreement to override many default rules unless the Act prohibits modification. A single member LLC may amend the agreement at any time. Together, the Operating Agreement, Articles of Organization, and any attached exhibits form the complete internal contract. Any matter not addressed in the agreement must follow the Act.