Operating Agreement LLC Nevada

A Nevada Limited Liability Company (LLC) Operating Agreement is an internal document that explains how the business will operate. It defines ownership interests, establishes management authority, and sets the procedures members will follow when making decisions. Some refer to it as a Nevada Operating Agreement or Nevada LLC Company Agreement. Regardless of the name used, it serves as the LLC’s primary internal governance document.

Many Nevada LLCs adopt an Operating Agreement during formation, while others prepare one later as operations expand. The agreement is not filed with the state and remains part of the LLC’s internal records.

Is a Nevada Operating Agreement Required?

Nevada does not require LLCs to adopt an Operating Agreement. Under Nevada Revised Statutes Chapter 86, an Operating Agreement may be written, oral, or implied. Although optional, a written Operating Agreement is strongly recommended. Without one, the LLC defaults to Nevada’s statutory provisions, which may not reflect how members intend to manage or structure the company.

Why a Nevada Operating Agreement Matters

Helps preserve limited liability protection

A written Operating Agreement helps demonstrate that the LLC operates as a separate legal entity. Courts may review internal governance documents when determining whether limited liability protections apply, especially for single member LLCs.

Establishes internal operating rules

Nevada’s default statutes apply only when an Operating Agreement is silent. A written agreement allows members to customize voting rights, management authority, profit distribution, and dispute resolution procedures.

Required by banks and professional advisers

Banks, lenders, accountants, and attorneys often request an Operating Agreement to confirm ownership and identify who has authority to act on behalf of the LLC.

Supports compliance with Nevada’s annual filing obligations

Nevada LLCs must file an Annual List of Managers or Members and maintain a state business license each year. Assigning responsibility for these filings in the Operating Agreement helps prevent lapses.

Key Provisions to Include in a Nevada Operating Agreement

Basic Company Details

• LLC name
• Business purpose
• Principal office address
• Duration of the LLC
• Federal tax classification

Nevada requires LLC names to include Limited Liability Company, LLC, or an accepted abbreviation.

Registered Agent and Office

• Name and Nevada street address of the registered agent
• Procedures for changing the registered agent
• Filing requirements with the Nevada Secretary of State

Member Information

• Names and addresses of members
• Ownership percentages
• Initial capital contributions

Capital Contributions

• Description of contributions made by each member
• Rules for future contributions
• Statement that contributions do not earn interest unless agreed

Management Structure

• Whether the LLC is member managed or manager managed
• Duties and authority of members or managers
• Procedures for appointing or removing managers

Profit and Loss Allocation

• Allocation method for profits and losses
• Timing and conditions for distributions
• Confirmation that distributions may only occur if the LLC can meet its obligations

Tax Election

• Federal tax classification selected by the LLC
• Notice that certain elections require IRS filings

Voting Procedures

• Voting rights of members
• Quorum requirements
• Vote thresholds for approving decisions

Nevada LLCs often base voting on ownership percentages unless modified by agreement.

Transfers of Interest

• Rules for voluntary and involuntary transfers
• Admission procedures for new members
• Treatment of interests upon withdrawal, death, or expulsion

Records and Bookkeeping

• Procedures for maintaining financial and company records
• Assignment of responsibility for filing Nevada’s Annual List and maintaining the state business license \
• Statement that failure to file may result in penalties or administrative revocation

Compensation

• Rules for compensating members, managers, or officers
• Reimbursement policies for business expenses

Dissolution

• Events that may trigger dissolution
• Steps for winding up the LLC
• Filing Articles of Dissolution with the Nevada Secretary of State

Amendments

• Procedures for modifying the Operating Agreement
• Requirement that amendments be approved in writing unless otherwise stated

Management Options for Nevada LLCs

Member Managed

Members oversee daily business operations and have authority to act on behalf of the LLC. This structure is common for closely held companies. Voting typically aligns with ownership percentages unless changed in the agreement.

Manager Managed

Members appoint one or more managers to handle day-to-day operations. Managers may be members or nonmembers. Members retain authority over major decisions while delegating routine management tasks.

Creating and Maintaining the Nevada Operating Agreement

Drafting and Signing

The Operating Agreement becomes effective once adopted by the members. Nevada recognizes written, oral, and implied agreements, but a written document provides clarity and reduces potential disputes.

Recordkeeping

The agreement should be stored with the LLC’s permanent records. Nevada’s annual filing and business license requirements make organized recordkeeping essential.

Amending the Agreement

Members may amend the Operating Agreement by following the procedures outlined within it. If changes affect information on file with the state, the LLC must update its filings with the Nevada Secretary of State.