Setting up a limited liability company (LLC) when starting a new business is a smart move for many. LLCs can offer you both flexibility and legal protection. 

If you decide to go this route and create an LLC in New Hampshire, you’ll want to consider creating an operating agreement for your LLC. The New Hampshire Secretary of State doesn’t technically require you to create and file this document – but it’s still a good idea because it can help you clarify financial arrangements, avoid internal conflicts, and set your business up for long-term success.

Ready to learn more about creating a New Hampshire LLC operating agreement? Read the in-depth guide below.

What is an LLC operating agreement?

An LLC operating agreement is an internal document that outlines the rules and structure of your business. Unlike corporations that require a formal board and officers, LLCs are more flexible – and an operating agreement is designed to define your business’s unique structure.

Within an LLC operating agreement, you can define:

• Ownership percentages
• Management roles
• Voting rights
• Profit and loss distribution
• Procedures for adding or removing members
• Steps for dissolving the company

The operating agreement serves as both a day-to-day guide for how your LLC will run and a legal safety net. It helps you to make sure that all members of your organization are on the same page, and it also helps you to avoid having to follow New Hampshire’s default LLC rules, which may not match how you actually want to run your business.

Why is an operating agreement important for New Hampshire LLCs?

Even though it’s not legally required in New Hampshire, creating an operating agreement is one of the smartest steps you can take when forming an LLC. That’s because without an operating agreement, according to NH Rev Stat 302-C:125, your business will be governed by New Hampshire’s default rules. This may or may not align with how you want your business to operate.

Without an operating agreement, New Hampshire statutes can play a role in determining:

• Who has authority to make key decisions
• How profits or losses may be distributed
• What happens when a member wants to leave the business
• What happens during business dissolution

Without a written agreement, issues like these can be left up to the interpretation of state law, which can lead to disputes and legal issues. LLC operating agreements protect you from these potential problems by providing clarity concerning issues like those above.

Key components of a New Hampshire LLC operating agreement

Every business is unique, but most LLC operating agreements include the following sections:

• Ownership structure: Who owns what percentage of the business, and how were those shares determined?
• Member roles and responsibilities: What are the responsibilities of managers and members?
• Voting rights and decision-making: Do all members have equal votes, or are votes weighted, and how are major decisions made?
• Profit and loss distribution: Will distributions be equal or based on ownership percentage, and when and how will distributions be made?
• Member changes: What’s the process for adding or removing a member?
• Dissolution terms: Under what conditions will the LLC dissolve, and what happens to the assets and liabilities?
• Recordkeeping and tax details: How will accounting be handled, and who is responsible for filing taxes?

How to create an LLC operating agreement in New Hampshire

To create a New Hampshire LLC operating agreement, follow these steps:

1. Gather founding members to discuss and agree upon the business structure.
2. Decide how ownership, decision-making, profits, and responsibilities will be handled.
3. Use a customizable operating agreement template as a starting point, or better yet – consult with a business attorney to create a custom version of your operating agreement.
4. Once drafted and all members agree, make sure everyone signs the document, then store it safely with your business records.
5. Be sure to update your LLC operating agreement whenever your business structure changes, like when you add new members or scale operations.

Throughout this process, it’s best to work with a legal professional who can help you tailor an operating agreement that aligns with your business goals while remaining compliant with state rules.

New Hampshire-specific considerations

As noted, New Hampshire doesn’t require LLCs to file an operating agreement, but the state does allow LLCs to shape their internal affairs with this document. According to RSA 304-C, you may:

• Modify the state’s default rules about distributions and duties
• Establish voting thresholds
• Define management roles clearly

However, there are limits as to what can be waived or altered. For example, you can’t authorize illegal behavior, even with unanimous agreement. 

Additionally, keep in mind that New Hampshire requires LLCs to have a registered agent with a physical address within the state. Your registered agent will need to be included in the operating agreement.

Final thoughts & next steps

Drafting an LLC operating agreement might not be a legal requirement in New Hampshire, but it is a strategic must. A well-planned operating agreement will protect your business, clarify your operations, and help prevent future disputes. 

Whether you’re going solo or forming a business with others, taking the time to craft this document gives  you control over how your LLC runs. 

Ready to start your LLC the right way? Use Tailor Brands’ online LLC formation service to make the process fast, simple, and fully compliant with New Hampshire law.

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