An Oregon operating agreement is the legal document that establishes the rules, processes, and management structure for an LLC. It serves as a binding contract between your members that determines many important processes for your LLC, including voting procedures, the distribution of profits and losses, membership interest, and dissolution, should it ever come to that. You can use one of our attorney-drafted templates to fill out, save, and download your operating agreement for free.
Unlike the Oregon Articles of Organization, you don’t need to file your operating agreement with the Secretary of State. But the operating agreement is one of your LLC’s most important documents, and it’s worth putting the time and effort into crafting a good one. Since we know this is no simple task, Northwest offers a range of free, attorney-drafted operating agreement templates that are customized for Oregon LLCs.
Oregon law gives you a lot of freedom over what you include in your operating agreement—OR Rev Stat § 63.057 (2019) states that an operating agreement can be used to create any rules for the LLC as long as they aren’t “inconsistent with the law or the Articles of Organization.” That said, there are some topics that you should be sure to include:
Want to focus on your business and leave the legal hullabaloo 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.
An Oregon 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.
OR Rev Stat §63.057 (2019) states that an operating agreement (“if any”) can be oral or in writing. However, just like you wouldn’t build a house and skip laying the foundation, you shouldn’t build an LLC and skip writing the operating agreement.
Oregon gives you the option of not listing all your members’ names on the Articles of Organization. Taking advantage of this will help you protect your privacy, but it could also make it difficult to prove to a bank, landlord, or potential investor that you actually own your LLC. With an operating agreement that lists all your members’ names and addresses, you can prove your ownership when you need to.
In order to maintain limited liability status, an LLC must be able to demonstrate that it is a separate legal entity from its owners. This is why LLC owners follow formalities like managing their business finances in a separate business bank account. This is also why it helps to have a written operating agreement that documents the rules and procedures your LLC follows. If your LLC is ever taken to court, a written operating agreement is a legally binding document you can use to support your case. A verbal operating agreement is difficult to prove, so it has less power.
There may come a time when your members can’t agree on an important matter. That’s when it helps to consult your operating agreement, which covers how you will proceed in a range of situations.
An operating agreement gives you more control over how your LLC functions. If you don’t adopt an operating agreement, your LLC will be governed by Oregon’s default LLC laws. Your operating agreement lets you override these default laws and run your LLC in the way that works best for you.
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 Sherwood Park Business Center, LLC, where a member’s financial desperation drove him to divert LLC resources for his own purposes, thereby breaching his fiduciary duties to the LLC and the other members and compromising the financial status of the LLC. The desperate member attempted to shield his situation by assigning his interest in the LLC to another LLC formed specifically for that assignment of interest. Fortunately for the other members, this bad faith member failed to adhere to the assignment procedure spelled out in the LLC’s operating agreement, thereby invalidating the bad faith member’s attempted transfer and preventing that member from escaping accountability for his bad acts.
“Because the members of the LLC in Sherwood Park adopted and maintained an operating agreement, the courts were easily and consistently able to side with members against the bad faith member and his improper actions. For these reasons (and more), a reasonably prudent business owner would (and should) adopt and maintain an operating agreement.”
Our LLC operating agreements are written by an attorney and work for a range of situations. Find the one that best suits your LLC below.