Utah LLC Operating Agreement Template

Utah LLC Operating Agreement Law

Utah's LLC Act, found in Chapter 3a of Title 48 of the Utah Code, lets the members of an LLC write their own operating agreement. The statute defines the agreement as the agreement of all the members, including a sole member, whether oral, implied, in a record or any combination of these.^[1] Where the agreement is silent, the statute governs the matter.^[2]

Under Utah Code § 48-3a-304, a debt, obligation or other liability of a Utah LLC is solely the company's own. A member or manager is not personally liable for it solely by reason of being or acting as a member or manager.^[3]

Subjects the Agreement Governs

Under Utah Code § 48-3a-112, the operating agreement governs four things, except where the statute says otherwise.^[2]

• How the members deal with each other as members and with the company.
• The rights and duties of a person acting as manager under the chapter.
• The company's activities and affairs, and how they are carried out.
• The means and conditions for amending the agreement.

The statute also says what happens to a matter the agreement does not cover.

To the extent the operating agreement does not provide for a matter described in Subsection (1), this chapter governs the matter.

Duties Members Can Change

Members can reshape the fiduciary duties they owe, but only if the change is not unconscionable or against public policy. Within that limit, the agreement may do four things.

• Alter or eliminate the aspects of the duty of loyalty stated in Utah Code § 48-3a-409(2) and (9).
• Identify specific types or categories of activities that do not violate the duty of loyalty.
• Alter the duty of care, but not authorize intentional misconduct or a knowing violation of law.
• Alter or eliminate any other fiduciary duty.

In a member-managed LLC, the agreement can also move a responsibility from one member to others. Suppose it expressly relieves a member of a responsibility the member would otherwise have under the chapter and imposes that responsibility on one or more other members. The agreement may then also eliminate or limit any fiduciary duty that came with it, to the benefit of the member it relieves.^[2]

The agreement may also set a method for approving an act that would otherwise violate the duty of loyalty. One or more disinterested and independent persons can authorize or ratify the act after full disclosure of all material facts.^[2]

Court Review of a Term

A court can strike a term of an operating agreement only in narrow cases. It judges the term as of the time it became part of the agreement and considers only the circumstances that existed then. It may invalidate the term only if one thing is readily apparent, given the company's purposes, activities and affairs. The term's objective, or the means to reach it, must be unconscionable or against public policy. The court decides that question as a matter of law.^[2]

How to Fill Out the Utah LLC Operating Agreement

The Utah LLC operating agreement template is a form of about 15 pages for an LLC with one member, whom the form calls the Member. The company is manager-managed, so the form also names the Managers and sets out its management structure. Work through it in order. The first page holds the name and address blanks, and the rest are checkboxes, dates and the schedules at the end.

Have these business details ready before you open the form, and check each one against your state filing.

• The LLC's exact business name and the filing date of the Articles of Organization with the state.
• The principal office address and the registered agent's name and address.
• The Member's name and address, and the names of any Managers and Officers.
• The start and end dates of the fiscal year.
• A short description of the Member's initial capital contribution.

1. Preamble (page 1). Enter the company name, the state of formation, the date on the dated-as-of line and the name of the Member. For example, a made-up company called Sample Wasatch Holdings LLC with a Member named Jane Sample. The line has a preprinted year of 2021, so check it against the date you sign.
2. Formation paragraph (page 1). Enter the state, the filing date of the Articles of Organization and the reference to the LLC statute in the blanks of the second paragraph. These formation details should match your state filing.
3. Sections 1 and 2, Name and Principal Business Office (page 1). Repeat the company name in Section 1 and enter the principal business office address in Section 2. A made-up address such as 100 Example Street shows the format.
4. Section 3, Registered Office (page 1). Enter the name and address of the registered agent on the line provided.
5. Section 6, Purposes (page 2). Check one box. Either write a description of the business, or choose all matters permitted by applicable law. A short business description is usually enough.
6. Section 8, Managers (page 2). Enter the initial number of Managers for the management of the business. Their names go on Schedule B.
7. Section 8(g), Compensation of Managers (pages 3 and 4). Check one box. Either Managers may be paid expenses for meetings, or no compensation or reimbursement is paid.
8. Section 9, Officers (page 4). Check one box. Either the company has no Officers, or it has Officers, who are then listed on Schedule B.
9. Section 15, Fiscal Year (page 6). Enter the date the fiscal year starts and the date it ends.
10. Section 30, Effectiveness (page 10). Enter the date the entity was legally formed, matching the date on page 1.
11. Signature block (page 11). The Member signs on the By line and prints a name and title. The form has no separate witness or notary block.
12. Schedule A (page 12). In the definition of Articles of Organization, enter the date the entity was legally formed. Leave the rest as printed.
13. Schedule B (page 14). Enter the Member's name and address, then up to six initial Managers and up to six initial Officers.
14. Schedule C (page 15). Describe what the Member contributed to the company at the start, such as cash or equipment.

When every blank is complete, read the agreement once from the first page to the last, sign the Member line, and keep a copy with the LLC's business records. To complete the downloaded PDF on screen, use our PDF editor.

Need a template for another state? Start from our LLC operating agreement template page.

In Utah, the filing that forms the LLC is a certificate of organization, which the organizers deliver to the Division of Corporations and Commercial Code. It states the LLC's name, its principal office address and the registered agent information that Utah Code § 16-17-203(1) requires, while the operating agreement itself is not filed with the state (Utah Code § 48-3a-201).^[4]

Under Utah Code § 48-3a-108, the company name must be distinguishable on the division's records from the actual, reserved, or fictitious or assumed name of any entity registered with the division.^[5]

Frequently Asked Questions

These questions cover writing your own agreement, what happens without one, whether it can be oral, what it can change about the duties members owe, and when a court can strike a term. Each answer comes from the Utah LLC Act.

Can I write my own operating agreement for my LLC?

Yes, within the limits the statute sets. Utah's LLC Act makes the operating agreement the members' own agreement. It governs how the members deal with each other and the company. It also covers the rights and duties of managers, how the company's activities and affairs are carried on, and how the agreement is amended.^[2]

What happens if an LLC does not have an operating agreement?

To the extent an operating agreement does not provide for a matter it can govern, the Utah LLC Act governs that matter. In other words, where the agreement is silent, the statute covers it.^[2]

Can a Utah operating agreement be oral?

Yes. The statute defines an operating agreement as the agreement of all the members, including a sole member. It counts whether or not it is called an operating agreement and whether it is oral, implied, in a record or any combination of these.^[1] Many LLCs still put the terms in writing so the members can see exactly what they agreed.

Can an operating agreement change the duties members owe?

Yes, but only if the change is not unconscionable or against public policy. Within that limit, the agreement may do these things.

• Alter or eliminate parts of the duty of loyalty.
• Name activities that do not violate the duty of loyalty.
• Alter the duty of care, but not authorize intentional misconduct or a knowing violation of law.
• Alter or eliminate any other fiduciary duty.

The law section above gives the details.^[2]

Can a court strike a term of an operating agreement?

Only in narrow cases. The court looks at the term as of the time it became part of the agreement. It may invalidate the term only if it is readily apparent that the term's objective, or the means to reach it, is unconscionable or against public policy. The court decides that question as a matter of law.^[2]

Other Utah Forms
We offer a wide range of popular Utah forms to anybody seeking ease when dealing with various agreements, contracts, and other paperwork.

Utah Last Will Utah Small Estate Affidavit Utah Bill of Sale Utah Power of Attorney Utah Rental Lease Agreement Utah Eviction Notice Utah Promissory Note Utah Non-compete Agreement Utah Prenuptial Agreement

General information, not legal or tax advice.

Sources

1. Utah Code 48-3a-102.
2. Utah Code § 48-3a-112.
3. Utah Code § 48-3a-304.
4. Utah Code § 48-3a-201.
5. Utah Code § 48-3a-108.

Jennifer M. Settles

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