Nebraska LLC Operating Agreements

A limited liability company, or LLC, formed under Nebraska law can adopt an operating agreement to govern the relationship among the owners -- called members -- and with the company. Nebraska law allows the members significant latitude in crafting the agreement, which can include establishing the management structure for the LLC and specifying the members' voting rights. Although the law does not mandate the adoption of an operating agreement, all LLCs should carefully consider preparing a written operating agreement.

Nebraska LLC Law

In April 2010, the Nebraska Uniform Limited Liability Company Act was signed into law and is intended to completely replace the Limited Liability Company Act enacted in 1993. The new law became effective on January 1, 2011, for all LLCs formed after that date. LLCs formed prior to that date would not be governed by the new law until January 1, 2013, unless the LLC files a statement with the secretary of state electing to be governed by the new law.

Old Law Operating Agreements

The old LLC law does not define the term "operating agreement" but also does requires an LLC to adopt an operating agreement in one situation. If the members choose to designate one or more managers to manage the LLC, the duties and responsibilities of the managers must be specified in an operating agreement. There is no requirement that the terms of the operating agreement be in writing.

New Law Operating Agreements

Unlike the old law, the new LLC law does not require an operating agreement in any particular situation, however, the new law does sets forth a very broad definition of the term "operating agreement." For new LLCs, an operating agreement will mean any agreement between the members whether "oral, in a record, implied or in any combination thereof" and regardless of whether it is referred to as an operating agreement. This definition is broad enough to include just about any interaction or record made by the members that can be construed as an agreement.

Practical Considerations

Not only is it a sound business practice to adopt a comprehensive written operating agreement for a Nebraska LLC, the new LLC law definition of operating agreement makes it imperative. Given the potential for controversy and disagreement about what may be included in an oral agreement or implied conduct, the members should specify their rights and duties to each other and the LLC in one written document that can be referred to when necessary. This written document should specifically state that it contains all the provisions of the LLC's operating agreement, regardless of how the term operating agreement is defined in the Nebraska LLC law.

References

• Nebraska Legislature: N.R.S. Chapter 21 -- Nebraska Uniform Limited Liability Company Act
• Nebraska Legislature: N.R.S. 21-197 Application to existing relationships
• Nebraska Legislature: N.R.S. 21-2601 Act, how cited; termination
• Nebraska Legislature: N.R.S. 21-2615 Management
• Nebraska Legislature: N.R.S. 21-102 Terms, defined

Resources

• Small Business Administraton: Operating Agreements -- The Basics