Operating Agreement LLC Oklahoma

An Oklahoma Limited Liability Company (LLC) Operating Agreement is an internal contract that clarifies roles, responsibilities, and governance rules for the LLC. It outlines how the legal entity will operate.

Legal Context

Under Section 18-2012.2 of the Oklahoma Limited Liability Company Act (OLLCA), an Operating Agreement is not required for Domestic or Foreign LLCs. An agreement may be oral, written, or implied. If the Operating Agreement does not address a matter, the provisions of the OLLCA apply. The agreement cannot alter rights, duties, or obligations that the statute imposes. Title 18, Chapter 32 of the Oklahoma Statutes provides the default rules for LLC governance.

Importance of an Operating Agreement

An Operating Agreement helps demonstrate that the LLC is operated as a separate legal entity, which is essential to maintain limited liability protection. Without one, a Single Member LLC may appear similar to a sole proprietorship. If no Operating Agreement exists, default rules govern matters such as management, voting, and profit distribution. A written agreement also provides proof of ownership for banks, lenders, and other third parties that may request it before doing business with the LLC.

Key Components

The Operating Agreement typically includes:

• Basic Information: LLC name, effective date, Oklahoma registered agent, business purpose, and duration.
• Ownership Structure

Identification of members and their membership interest percentages.

• Initial Capital Contributions

The amount of money or property contributed by each member.

• Management Structure

Member-managed: All members participate in daily operations and can bind the LLC.

Manager-managed: Designated managers run operations and can bind the LLC, members vote on specific matters.

• Voting Rights

Rules for member voting, typically based on ownership percentages.

• Profit and Loss Allocation

Method for distributing financial results among members.

• Tax Classification

Federal tax treatment as a sole proprietorship, partnership, S Corporation, or C Corporation. Oklahoma is not a community property state, so an LLC cannot be taxed as a Qualified Joint Venture.

• Dissolution

Procedures for winding up the LLC and distributing remaining assets.

Drafting and Maintenance

The Operating Agreement is an internal document and is not filed with the Oklahoma Secretary of State. There is no filing fee. It becomes effective when signed by the members. Members should retain a copy with LLC records and may be required to produce it during legal proceedings or audits. If amendments are needed, changes may be made by the members according to the agreement. If no procedure is stated, amendments may be adopted with approval from members holding a majority of the membership interest entitled to vote. Amendments apply even to assignees or dissociated members regarding obligations owed to them.