Operating Agreement LLC Connecticut

A Connecticut Limited Liability Company (LLC) Operating Agreement is an internal document that explains how the company will operate. It outlines the ownership structure, defines the management framework, and establishes procedures for decision making. Some refer to it as a Connecticut Operating Agreement or Connecticut LLC Company Agreement. Regardless of the term used, it serves as the primary internal governance document for the LLC.

Many LLCs prepare this agreement at the time of formation, while others adopt it later as the company’s operations become more defined. The agreement is not filed with the state and remains part of the LLC’s internal records.

Is a Connecticut Operating Agreement Required?

Connecticut does not require LLCs to adopt an Operating Agreement. Under the Connecticut Uniform Limited Liability Company Act, an Operating Agreement may be written, oral, or implied. Even though it is not mandatory, preparing a written agreement is strongly recommended. Without one, the LLC relies on Connecticut’s default statutory provisions, which may not align with the members intended structure.

Why a Connecticut Operating Agreement Matters

Supports limited liability protection

A written Operating Agreement helps show that the LLC is treated as a separate legal entity from its members. Courts may review internal documentation when deciding whether to uphold limited liability protections. This is especially important for single member LLCs.

Establishes internal rules and expectations

Connecticut’s statutory rules apply only when an Operating Agreement does not address an issue. A written agreement lets members define voting standards, financial distributions, management duties, dispute resolution procedures, and other operational rules.

Required by financial institutions and third parties

Banks, lenders, and accountants commonly request an Operating Agreement to verify ownership and confirm management authority when opening accounts or issuing financing.

Addresses Connecticut’s Annual Report filing requirement

Connecticut LLCs must file an Annual Report each year. The Operating Agreement helps assign responsibility for filing and maintaining compliance with state requirements.

Key Provisions to Include in a Connecticut Operating Agreement

Basic Company Details

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

Connecticut requires LLC names to include Limited Liability Company, LLC, or a permitted abbreviation.

Registered Agent and Office

• Name and Connecticut address of the registered agent
• Procedures for changing the registered agent
• Filing obligations with the Connecticut Secretary of the State

Member Information

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

Capital Contributions

• Detailed list of contributions by each member
• Terms for additional contributions
• Statement that contributions do not automatically earn interest

Management Structure

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

Profit and Loss Allocation

• How profits and losses are allocated
• Distribution timing and conditions
• Confirmation that distributions may occur only when the LLC can satisfy its obligations

Tax Election

• Federal tax classification chosen by the LLC
• Statement that certain federal tax elections require IRS filings

Voting Procedures

• Member or manager voting rights
• Quorum requirements
• Vote thresholds needed for approving actions

Unless modified, many Connecticut LLCs follow ownership-based voting.

Transfers of Interest

• Procedures for transferring membership interests
• Admission rules for new members
• Treatment of membership interests upon withdrawal, death, or expulsion

Records and Bookkeeping

• How financial statements, tax records, and company documents will be maintained
• Responsibility for filing Connecticut’s Annual Report
• Statement that failure to file may lead to penalties or administrative consequences

Compensation

• How members, managers, or officers will be compensated
• Reimbursement rules for business expenses

Dissolution

• Events that may cause dissolution
• Winding-up procedures
• Filing a Certificate of Dissolution with the Connecticut Secretary of the State

Amendments

• Procedures for modifying the Operating Agreement
• Requirement for written approval unless otherwise specified

Management Options for Connecticut LLCs

Member Managed

Members oversee daily operations and may bind the LLC through authorized actions. This structure is common for LLCs with active owners. Voting authority typically corresponds to ownership percentages unless specified otherwise.

Manager Managed

Members appoint one or more managers to operate the business. Managers may be members or outside individuals. Members retain the right to approve major decisions while managers handle daily activities.

Creating and Maintaining the Connecticut Operating Agreement

Drafting and Signing

The Operating Agreement becomes effective when adopted by the members. Connecticut recognizes written, oral, and implied agreements, but a written document provides clarity and minimizes disputes. The agreement is not filed with the state.

Recordkeeping

The agreement should be stored with the LLC’s permanent documents. Connecticut’s Annual Report requirement makes accurate recordkeeping important for maintaining good standing.

Amending the Agreement

Members may amend the Operating Agreement according to the procedures outlined in the document. If amendments affect information on file with the Connecticut Secretary of the State, the LLC must submit updated filings.