LLC Operating Agreement Amendment
Rather than create a whole new Operating Agreement to make changes or additions, you can use an LLC Operating Agreement Amendment form to change only specific provisions and clauses.
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Frequently Asked Questions
An amendment is used when the parties need to make revisions, deletions, and additions to the original operating agreement. An addendum is used when the parties only need to make an addition to the original agreement.
Generally, an LLC operating agreement amendment does not need to be notarized. You only need to sign the document to make it legally enforceable. A witness may be helpful if anyone ever attempts to contest the document, but a notary is not strictly necessary.
That said, the use of a notary ensures that no one challenges any signatures later and is a secure way to establish the effectiveness of your document.
If your goal is to maintain the LLC, a non-contentious process that all parties can agree upon is preferable. Mediation focuses on finding a compromise in which all parties feel satisfied with the outcome. Mediation and arbitration are typically far less expensive than going through the courts, especially for minor amendments.
Most business decisions are resolved by a majority vote from the members of the LLC. But an operating agreement can make a sharp distinction between decisions made as a matter of course and decisions that significantly impact the members. Decisions that bear a greater impact on members' interests may need a supermajority or a unanimous decision to provide more protection for each partner.
In most cases, adding a new member will dilute the current members' ownership stakes as the new member will be entitled to a percentage of units. However, that's not always the case. The new member's share of interest in the LLC will be proportional to their capital contributions. A new member may make the LLC proportionally larger, increasing the value of the other members' units.
Use an LLC Operating Agreement Amendment whenever you make changes to the original LLC Operating Agreement. Some situations require changes so extensive as to merit a complete dissolution of the LLC, or members may not be able to agree on changes in a way required by the original agreement. However, these situations are rare, and most additions and modifications can be handled with an amendment.
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