Free Kentucky LLC Operating Agreement Form

Kentucky LLC Laws and Definition

Kentucky's LLC statute, Ky. Rev. Stat. § 275.015, defines the term in a single sentence. The definition covers both written and oral agreements, so a signed document is not the only form an operating agreement can take.^[2] The statute puts the definition in these words:

"Operating agreement" means any agreement, written or oral, among all of the members, as to the conduct of the business and affairs of a limited liability company.

The same statute adds two points:

• An oral agreement can be valid, because the definition covers an agreement that is written or oral.^[2]
• An LLC with only one member can have an operating agreement, and the statute says what it includes.^[2]

KRS 275.170 is the section that sets those duties. Unless a written operating agreement provides otherwise, it covers the duties of care and loyalty, the approval of conflict-of-interest transactions and the remedy for a breach of the duty of loyalty.^[3]

Kentucky law shields the owners whether or not the LLC has an operating agreement. No member, manager, employee or agent of an LLC is personally liable for a debt, obligation or liability of the company just because of that role (KRS 275.150).^[4]

Unless the agreement says otherwise, amending a written operating agreement takes the members' approval (KRS 275.175).^[5]

What a Kentucky LLC Agreement Covers

A Kentucky LLC agreement usually states who owns the LLC, how it is managed, and how profits are shared. Most agreements cover the points below, and the template has a place for each of them.

• Members and ownership: The members' names and each member's share of the LLC. A sole owner usually lists one member with the full share.
• Profits, taxes and distributions: How profits are shared, how the LLC's taxes are handled, and when members receive money from the LLC.
• Management: Who runs the LLC, such as the members or one or more managers, and how decisions are made.
• Changes in ownership: How a member's interest can be assigned or transferred to someone else.
• Dissolution: How the LLC is dissolved and its affairs are wound up.
• Signatures: Each owner signs to show that they accept the terms.

Putting these points in one document helps every owner understand the LLC's goals, rights and responsibilities. Read each point carefully and ask a lawyer if something is unclear. Keep the signed copy with your LLC records. A bank may ask for it when you open a bank account for the business, and Kentucky requires the company to keep copies of any written operating agreement and its amendments at its principal office or another place the written agreement names (KRS 275.185).^[6]

This form is written for an LLC with one owner. If your LLC has more than one owner, use the multi-member LLC agreement template instead. It also sets each owner's share and how profits and losses are divided.

You can also browse the LLC operating agreement templates for other states.

How to Fill Out the Kentucky LLC Template

This Kentucky template has 15 pages and is written for an LLC with one member. Fill it out online with our form builder, or download the PDF and complete it with our PDF editor. The steps below follow the document from the first page to the last schedule.

1. Title and opening paragraph (page 1). Enter the LLC name, Kentucky as the state of formation, the date, and the name of the sole member. The form prints 2021 after the date line, so change the year if needed.
2. Articles of Organization and statute (page 1). Enter the date the Articles of Organization were filed with the Secretary of State. Then name the LLC statute the form asks for.
3. Sections 1 to 3: name, office and registered agent (page 1). Repeat the LLC name and enter the principal business office. Then enter the name and address of the registered agent, the person or business that receives legal papers for the company.
4. Section 6: Purposes (page 2). Tick one box. Either describe the business the company will carry on, or choose the option for all matters permitted by applicable law.
5. Section 8: Managers (page 2). The form sets the company up as manager-managed. Enter the initial number of Managers and list their names on Schedule B.
6. Section 8(g): Compensation of Managers (page 3). Tick one box. Either the Managers may be paid their expenses of attending meetings, or there is no compensation and no reimbursement of expenses.
7. Section 9: Officers (page 4). Tick whether the company has no Officers or has Officers. If it has Officers, state each role as the form directs.
8. Section 15: Fiscal Year (page 6). Enter the date the fiscal year starts and the date it ends.
9. Section 30: Effectiveness (page 10). Enter the date the entity was legally formed, as the form directs.
10. Signature block (page 11). The sole member signs on the By line and fills in the name and title below it. The form has no witness or notary line.
11. Schedule A: Definitions (page 12). Enter the date the Articles of Organization were filed. Leave the other definitions as printed.
12. Schedule B (page 14). Enter the member's name and address, the initial Managers and the initial Officers.
13. Schedule C: Initial capital contribution (page 15). Describe what the member has contributed to the company, such as assets, services or other items. Section 11 of the form refers to this schedule.

Frequently Asked Questions

The questions below cover LLCs with one member, oral agreements and the limits an agreement can set in Kentucky. Each answer comes from the Kentucky statutes listed at the end of this page, so you can check the wording yourself before you rely on it.

Does Kentucky recognize a single-member operating agreement as valid and enforceable?

Kentucky's statute recognizes it. If an LLC has only one member, the agreement is deemed to include the following:

• A writing executed by the member that relates to the affairs of the company and the conduct of its business, whether or not the writing is an agreement.^[2]
• If the LLC is managed by a manager, any other agreement between the member and the company as it relates to the company and its business, whether or not the agreement is in writing.^[2]

Is an oral LLC agreement valid in Kentucky?

Yes. Kentucky's definition covers an agreement that is written or oral.^[2]

Even so, writing the terms down lets every member see the same terms.

Can a written Kentucky LLC agreement limit damages for a breach of duty?

A written operating agreement may eliminate or limit the personal liability of a member or manager for monetary damages for breach of any duty provided for in KRS 275.170.^[1]

Read that clause carefully before you sign, because it changes what a member or manager can be held responsible for.

Other Kentucky Forms
Try out our document builder to customize any template available on our site to your needs. Here is a list of some other common Kentucky documents we offer.

Kentucky Last Will Kentucky Living Will Kentucky Bill of Sale Kentucky Power of Attorney Kentucky Promissory Note Kentucky Non-compete Agreement Kentucky Prenuptial Agreement

General information, not legal or tax advice.

Sources

1. KRS 275.180(1).
2. Ky. Rev. Stat. § 275.015.
3. KRS 275.170.
4. KRS 275.150(1).
5. KRS 275.175(2)(a).
6. KRS 275.185(1)(d).

Jennifer M. Settles

Author & Attorney

With over 25 years of experience as a business and transactional attorney, Jennifer has mastered the craft of closing highly successful deals for her clients. Through her wide-ranging expertise in commercial contracts, real estate transactions, M&A and corporate law, Jennifer secures results that are second-to-none.