Michigan LLC Operating Agreement

Use the builder above to fill in the Michigan form online. For a general overview that applies in any state, read our guide to the LLC operating agreement.

Michigan LLC Operating Agreement Laws

Michigan's Limited Liability Company Act (Act 23 of 1993) defines the operating agreement. It is a written agreement by the member of a one-member LLC, or between all of the members of an LLC with more than one. The agreement is about the affairs of the LLC and the conduct of its business.^[1.1] The statute's own words follow.

"Operating agreement" means a written agreement by the member of a limited liability company that has 1 member, or between all of the members of a limited liability company that has more than 1 member, pertaining to the affairs of the limited liability company and the conduct of its business.

• A one-member LLC and a multi-member LLC can both have an operating agreement.
• An operating agreement of a one-member LLC is not unenforceable because only one person is a party to it.^[1.3]

Default Rules and the Articles of Organization

Distributions of cash or other assets are shared among the members the way the operating agreement provides. If the agreement does not provide for an allocation, the Act divides distributions in equal shares among all members, except as subsection (2) of the same section provides.^[1.4]

If there is a conflict between the articles of organization and your operating agreement, the articles control.^[1.2] Check that the two documents agree before you sign.

Under Section 450.4203 of the Act, your articles of organization must contain the LLC's name, its purposes, the street address of its initial registered office and the name of its initial resident agent there, and a statement if managers will manage the business. They also give the LLC's duration if it is not perpetual.^[1.5]

Under Section 450.4204, the LLC's name may not imply a purpose other than those its articles allow, may not contain the word corporation or incorporated or the abbreviation corp. or inc., and must be distinguishable in the state administrator's records from other entity names.^[1.6]

Under Section 450.4207, the resident agent may be a Michigan resident, including a member or manager, whose business office or home is the registered office. It may also be a domestic corporation or LLC, or a foreign one authorized to do business in Michigan, with a business office at the registered office. Legal process, notices and demands against the LLC may be served on that agent.^[1.7]

What to Put in a Michigan LLC Operating Agreement

Most operating agreements record who owns the company, how the business is run, and how money is shared. A multi-member LLC has more to settle than a one-member LLC, but both can put their terms in writing. The list shows what owners commonly include.

• Company details: the LLC's name, location, purpose, registered agent, type of activity, and formation date.
• Member details: each member's full legal name, contribution, percentage interest, and signature.
• Roles and management: what each member and manager does and how the business is run.
• Money and taxes: how business profits are distributed and how tax matters are handled.
• Disagreements and exit: what happens when members disagree and how the LLC is dissolved.
• Basics: the effective date, the state, and the type of agreement.

Many owners also ask a licensed attorney to review the agreement before they sign. Members should all read every part of it and agree on the terms.

What the Michigan Operating Agreement Template Covers

Our template is a 15-page operating agreement with 31 numbered sections and three schedules. Each section has a title, so you can see what the business agreement covers before you fill it in.

• Sections 1 to 5: the name, the principal business office, the registered office, the Member, and certificates.
• Sections 6 to 9: purposes, powers, Managers, and Officers.
• Sections 10 to 14: limited liability, capital contributions, additional contributions, allocation of profits and losses, and distributions.
• Sections 15 to 20: the fiscal year, books and records, other business, exculpation and indemnification, assignment, resignation, and admission of additional members.
• Sections 21 to 31: dissolution, waiver of partition, severability, entire agreement, governing law, amendments, counterparts, notices, effectiveness, and disregarded entity status.
• Schedules A to C: definitions, the Member, Managers and Officers, and the initial capital contribution.

The template is one standard form for a single Member. You choose between printed options in a few places, such as purposes, Manager compensation, and Officers.

How to Fill Out the Michigan LLC Operating Agreement

Our Michigan LLC operating agreement template is a 15-page form written for an LLC with one member. Fill in the blanks in the order they appear, from the preamble on page 1 to Schedule C on page 15. Keep the date your Articles of Organization were filed handy, because the form asks for it more than once.

1. Preamble (page 1). Enter the LLC name, the state, and the date. Then add the Member's name, the date the Articles of Organization were filed, and the LLC statute reference where each bracketed prompt asks. The form prints the year 2021 in the date line, so check it.
2. Sections 1 to 3 (page 1). Repeat the LLC name in Section 1. Write the principal business office address in Section 2. Enter the registered agent's name and address in Section 3.
3. Section 6, Purposes (page 2). Select one box. Either describe the business in the blank or select all matters permitted by applicable law.
4. Section 8, Managers (page 2). Enter the initial number of Managers in Section 8(a). The Managers' names go on Schedule B, so decide who will manage the business before you fill it in.
5. Section 8(g), Compensation of Managers (page 3). Select one box. Managers may be paid expenses, or there is no compensation or expense reimbursement.
6. Section 9, Officers (page 4). Select whether the LLC has no Officers or has Officers. If you choose Officers, write each Officer's role where the form asks.
7. Section 15, Fiscal Year (page 6). Enter the date the fiscal year starts and the date it ends.
8. Section 30, Effectiveness (page 10). Enter the date the entity was formed.
9. Signature block (page 11). Sign on the By line as the Member, then print the name and title below it. Sign only after every blank above is filled in.
10. Schedule A, Definitions (page 12). Enter the date the entity was formed in the Articles of Organization definition. Leave the other definitions as printed.
11. Schedule B, Member, Managers and Officers (page 14). Enter the Member's name and address, for example Anna Baker. Then list the initial Managers and, if Section 9 has Officers, the initial Officers.
12. Schedule C, Initial capital contribution (page 15). Describe what the Member contributed to the LLC on the Insert Description line.

Frequently Asked Questions

These are the questions people ask most about the Michigan LLC operating agreement. Each answer cites the section of the Michigan LLC Act behind it. For advice about your own LLC, ask a Michigan attorney.

Does your LLC have to have an operating agreement?

Michigan's LLC Act defines the operating agreement as a written agreement about the affairs of the LLC and the conduct of its business. It is made by the member of a one-member LLC or between all the members of a larger one.^[1.1] Many owners put the terms in writing so that every member works from the same text.

Does Michigan require an operating agreement for LLC?

The Act covers the one-member LLC directly. Its operating agreement is not unenforceable because only one person is a party to it.^[1.3] If the agreement conflicts with the articles of organization, the articles control.^[1.2]

What should you know about LLC agreements in Michigan?

Four points from the Michigan LLC Act:

• The operating agreement is a written agreement about the LLC's affairs and the conduct of its business.^[1.1]
• A one-member LLC can have one, and it is not unenforceable because only one person is a party.^[1.3]
• If the agreement does not provide for an allocation, distributions of cash or other assets are shared in equal shares among all members.^[1.4]
• If the agreement conflicts with the articles of organization, the articles control.^[1.2]

General information, not legal or tax advice.

Other Michigan Forms
Other printable Michigan forms readily available for download and that can be customized in our simple document builder.

Michigan Last Will Michigan Living Will Michigan Small Estate Affidavit Michigan Bill of Sale Michigan Power of Attorney Michigan Rental Lease Agreement Michigan Eviction Notice Michigan Promissory Note Michigan Non-compete Agreement Michigan Prenuptial Agreement Michigan Marital Settlement (Divorce) Agreement

Sources

1. Mich. Comp. Laws §§ 450.4102 to 450.4303(1).
   • 1.1 § 450.4102
   • 1.2 § 450.4214
   • 1.3 § 450.4215
   • 1.4 § 450.4303(1)
   • 1.5 § 450.4203(1)
   • 1.6 § 450.4204(3)
   • 1.7 § 450.4207

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