How to Fill Out an IRA LLC Operating Agreement Form

An IRA LLC operating agreement form is necessary when a limited liability company is created to oversee the investments of an IRA. LLCs are often formed when IRA funds are to be invested in such nontraditional arenas as real estate. An LLC can have many members or can be run as a sole-proprietorship.

Instructions

Difficulty: Moderate

Things You’ll Need:

• IRA LLC operating agreement form

Form an LLC

1. Contact your state's Department of the Secretary of State and request the application packet to form an LLC for your IRA. There are a variety of accompanying forms to fill out in addition to the standard form, which is sometimes also known as "Limited Liability Company Articles of Organization." Ask for a copy of the fee schedule so you know exactly how much it will cost to file the paperwork.
2. Fill out the operating agreement form in its entirety, beginning with the name, which must end with some version or abbreviation of "Limited Liability Company." You must also reserve and register the name of your corporation, since you can't use a name already existing in your state. Sometimes an LLC will register in a state other than which it is based, if most of the business is conducted in another state.
3. Determine whether your LLC is to be managed by multiple managers, by one manager or by all of the LLC members, since this must be indicated on the agreement form. On some forms, the manager may be referred to as the "registered agent," which essentially means the person to whom all official correspondence will be sent.
4. Submit the paperwork, along with any filing fees to the Department of the Secretary of State in person or by registered mail.

Customize the IRA LLC Operating Agreement

5. Customize the operating agreement to the needs of your IRA, being sure to consult with the custodian of your IRA. Since the LLC is governed by the state, the members or owner of the LLC can't be held personally liable for any losses incurred. Still, make sure everything is on the up-and-up before proceeding.
6. Include detailed information about your business in your IRA LLC operating agreement. This should include a breakdown of members' rights, interest holdings and specifics about how loss or profit will be divided. In addition, consider provisions for what happens when a member wants to sell or no longer hold interest in the LLC.
7. Decide which investments the LLC will make. Often, an IRA LLC is a sole proprietorship, which means that you have the control and flexibility over the investment of funds. Fill out a business plan for investments to which you can refer when organizing with your brokerage firm.

Tips & Warnings

• An LLC is still bound to the IRS rules surrounding self-dealing. If you are forming an LLC, it may be better to have a separate manager to avoid the appearance of financial impropriety.