Your operating agreement is the legal document that establishes the rules and processes of your Minnesota LLC. Once all LLC members have signed the operating agreement, it is legally binding and determines how your business will execute important functions, including voting, transferring membership interest, distributing profits and losses, and—if necessary—dissolving the business. You can use one of our attorney-drafted templates to fill out, save, and download your operating agreement for free.
While the Minnesota Articles of Organization need to be filed with the Secretary of State’s office, your operating agreement is an internal document that your LLC keeps on record. However, adopting a strong operating agreement is extremely important for Minnesota LLCs. For a new business owner, it can be hard to know where to start when creating an operating agreement. That’s why Northwest provides free operating agreement templates that are customized for a range of LLC types.
Your Minnesota operating agreement maps out how your LLC will function internally. You can include almost anything your operating agreement—as long as it doesn’t go against Minnesota laws—but it’s important that you cover the following subjects:
Want to leave the legal document sourcing to us? Our lawyers drafted a comprehensive operating agreement you can use for free. You can even fill it out on this page, save it in a free account for later, and download a completed draft to sign.
In order to fill out our free operating agreement template, you’ll need your:
This must be your business’ legal entity name, or the name you put on your LLC Articles of Organization.
Did an LLC member contribute $500? $5k? A storefront? Put that here.
You’ll just write in 16 here since our version has a set amount of pages.
Remember, this is an internal document, so you won’t have to submit these names to the state just because they’re on here. However, you might need to add these people to your BOI Report.
Include any initial contributions, even if it’s only a small percentage.
While we recommend having a business bank account, some banks like to actually see the operating agreement before you open the account. If that’s the case, you can leave this blank for now.
This is the place your business operates from.
You can add this in later if you aren’t sure when your meeting will be held.
There’s a few different spots where you’ll need to add at least one members’ signature. These are on pages 13, 14, 15, and 16 on our template.
A Minnesota LLC should have an operating agreement because a company cannot act for itself. In order to operate, LLCs require real humans (and other entities) to carry out company operations.
A Minnesota LLC isn’t legally obligated to have an operating agreement. Minnesota Statute § 322C.0110 outlines what an operating agreement may cover but doesn’t state that LLCs must have one. Still, we at Northwest strongly recommend adopting a written operating agreement. Here’s why.
In Minnesota, you can opt out of including your members’ names on the Articles of Organization. This helps you keep more of your personal information off the public record, but it could make it tricky for you to prove who owns your LLC, which you’ll most likely need to do to open a business bank account. Here’s when an operating agreement comes in handy. Since your operating agreement will list all LLC members’ names and addresses, you can show it to a bank to prove ownership.
To maintain your limited liability status, your LLC must be able to show that it is a legally separate entity from the people who own it. To demonstrate this, LLCs must open a business bank account to keep business spending separate from members’ personal spending. Another way to show that your LLC is its own legal entity is by adhering to the rules and procedures documented in your operating agreement. If your LLC ever goes to court, your operating agreement could make a big difference in your case.
It would be nice to believe you’ll never argue with the people you go into business with, but let’s be honest—it might happen. If you do run into conflict, you will refer to your operating agreement, which establishes in advance how your LLC will act in a variety of situations.
Any rule not established in your operating agreement will automatically be decided by Minnesota’s default LLC laws. These laws might not work well for how you want to structure your business. A custom operating agreement lets you override these default laws and create the best rules and structure for your LLC.
We asked our lawyers for an example of how an operating agreement can make or break your LLC. Here’s what they said.*
“ Consider the case of Trails End Enterprises of Duluth LLC , where several individuals sought to develop a piece of real estate, however, for reasons not revealed to the courts, the individuals decided to proceed by forming a single-member member-managed LLC. Years later, motivated by the inability to acquire value of the real estate conveyance to the LLC, one of the initial individuals brought legal action against the LLC and the sole-member claiming that the LLC and sole-member financially damaged the individual. Looking to the clear and explicit terms of the operating agreement, the courts decided the matter in the favor of the LLC and found that the individual had willfully and validly (yet strangely) conveyed the real estate to the LLC without any direct financial compensation.
“ Assuming good faith on all parties, had the involved parties planned ahead, discussed potential pain points, and distilled their understanding into a written agreement, and continued to maintain that agreement , then this dispute could have been avoided and valuable resources could have been preserved for more fulfilling commercial purposes. For these reasons (and more), a reasonably prudent business owner would (and should) adopt and maintain an operating agreement.”
Below are a range of free Minnesota operating agreement templates that have been drafted by an attorney. Select the one that works best for your company.