Operating Agreement LLC Idaho

An Idaho Limited Liability Company (LLC) Operating Agreement is an internal document that explains how the business is owned and managed. Idaho does not require LLCs to create one, but the agreement is important for defining internal rules, confirming ownership, and maintaining the LLC’s limited liability status.

What Is an Idaho LLC Operating Agreement

An Operating Agreement provides the framework for how an Idaho LLC functions. It usually identifies:

• The names of all members
• Each member’s capital contributions
• Ownership percentages
• Management structure, either member-managed or manager-managed
• Voting rules, profit allocation, and buyout procedures

Single-member LLCs use this agreement to show a clear separation between personal and business activities, which supports limited liability protection.

Is an Operating Agreement Required in Idaho

No. Idaho does not require LLCs to adopt an Operating Agreement. Without one, the company must follow the default rules in the Idaho Uniform Limited Liability Company Act located in Idaho Code Title 30, Chapter 25. These rules may not reflect how members want to run the business. Banks, lenders, and business partners often ask for an Operating Agreement to verify ownership and decision-making authority.

Governing Laws

Idaho LLCs operate under the Idaho Uniform Limited Liability Company Act. The Operating Agreement may replace most default rules unless a term conflicts with a mandatory provision of Idaho law.

LLCs may also choose their federal tax classification. A company may file IRS Form 8832 – Entity Classification Election if it wants to be taxed as a corporation rather than as a pass-through entity.

Management and Member Responsibilities

An Operating Agreement often explains the company’s management structure:

• Member-managed: Members handle daily operations.
• Manager-managed: Managers run the business, and members vote only on major issues.

Limited liability: Members are not personally responsible for company debts beyond their contributions unless required by law or agreed in writing.

Fiduciary duties: Members and managers must act in good faith and avoid gross negligence, willful misconduct, or knowing violations of law, as outlined in Idaho LLC fiduciary duty requirements.

Registered Agent: Idaho requires every LLC to list a registered agent on its formation documents. Any change must be filed with the Idaho Secretary of State – Business Services.

Execution and Amendments

The Operating Agreement is an internal record and is not filed with the state. It becomes effective once all members sign it. Notarization is not required.

Members may amend the agreement when business terms change. Updated versions should be stored with the LLC’s records to maintain accurate governance documents. Idaho also requires LLCs to keep current information with the state, including registered agent updates filed through the Idaho SOS business filings system.