Your Limited Liability Company

An Operating Manual

Running your LLC, step-by-step

Keep your LLC in good standing with the law. Use this book's forms and instructions to create a paper trail that show the courts and the IRS that you've followed the rules. This bestseller shows you how to:

  • prepare minutes of meetings
  • record important legal, tax, and business decisions
  • keep a complete LLC records book

Includes all the legal forms you need!


Available as part of Nolo's Start & Run an LLC Bundle

  • Product Details
  • A limited liability company can give your small business tax benefits and shield you from personal liability for business debts. But without careful record keeping, regular meetings, and formal minutes, you could lose these advantages.

    Your Limited Liability Company provides all the instructions and forms you need to maintain the legal validity of your LLC. Forms include:

    • Minutes of LLC Meeting
    • Waiver of Notice of Meeting
    • Approval of LLC Minutes
    • Written Consents for Single-Member LLCs

    You‘ll also find more than 50 of the most commonly used legal resolutions to insert into your minutes or written consents. Use them to:

    • declare distributions of LLC profits to members
    • hire employees and contract with outside firms
    • approve LLC contracts
    • approve salary increases and bonuses
    • authorize bank loans
    • elect corporate tax treatment for your LLC, and
    • amend the articles and operating agreement.

    “We‘ve never seen a Nolo book we didn’t like.”—Small Business Opportunities

    “The nation‘s largest publisher of self-help legal books and software.”—Wall Street Journal


    Number of Pages
    Included Forms

    Preparing for LLC Meetings

    • Meeting Summary Sheet
    • Meeting Participant List
    • Notice of Meeting
    • Acknowledgment of Receipt of Notice of Meeting
    • Membership Voting Proxy
    • Certification of Mailing of Notice

    LLC Minutes and Written Consents

    • Waiver of Notice of Meeting
    • Approval of LLC Minutes
    • Cover Letter for Approval of Minutes of LLC Meeting
    • Written Consent to Action Without Meeting
    • Minutes of LLC Meeting

    Standard LLC Business Resolutions

    • Authorization of Treasurer to Open and Use LLC Accounts
    • Authorization of Treasurer to Open and Use Specific LLC Account(s)
    • Authorization of LLC Account and Designation of Authorized Signers
    • Authorization of Rental of Safe Deposit Box
    • Adoption of Assumed LLC Name
    • Approval of Contract
    • Approval of Lease of Premises by LLC
    • Purchase of Real Property by LLC
    • Authorization of Sale of Real Property by LLC
    • Delegation of LLC Authority
    • Ratification of Contract or Transaction
    • Rescission of Authority
    • Certification of LLC Resolution
    • Affidavit of LLC Resolution
    • Acknowledgment

    LLC Tax Resolutions

    • LLC Election of Corporate Tax Treatment
    • Approval of Independent Audit of LLC Financial Records
    • Approval of LLC Tax Year

    Resolutions to Amend the LLC Articles and Operating Agreement

    • Approval of Amendment to Articles of Organization
    • Approval of Restatement of Articles of Organization
    • Amendment of Articles Form
    • Amendment of LLC Operating Agreement

    Membership Resolutions

    • Approval of LLC Distribution
    • Approval of Additional Contributions of Capital by Members
    • Admission of New Member
    • Approval of Transfer of Membership
    • Approval of LLC Purchase of Interest of Withdrawing Member

    LLC Hiring and Compensation Resolutions

    • Approval of LLC Hiring
    • Approval of Bonuses and Salary Increases
    • Approval of Independent Contractor Services
    • Appointment of LLC Officers
    • Authorization of Payment for Attending LLC Meetings
    • Annual Stipend for Attendance at LLC Meetings
    • LLC Indemnification and Insurance

    Loans to the LLC

    • Authorization of Loan to LLC at Specific Terms
    • Authorization of Maximum Loan Amount to LLC
    • Authorization of LLC Representative to Borrow Funds on Behalf of LLC as Needed
    • Authorization of Loan Terms Secured by LLC Property
    • Authorization of Line of Credit
    • Authorization of Line of Credit With Cap on Each Transaction
    • Authorization of Line of Credit Secured by LLC Property
    • Approval of Loan to the LLC
    • LLC Promissory Note: Installment Payments of Principal and Interest (Amortized Loan)
    • LLC Promissory Note: Installment Payments of Principal and Interest (Amortized Loan) Secured by LLC Property
    • LLC Promissory Note: Installment Payments of Principal and Interest (Amortized Loan) With Balloon Payment
    • LLC Promissory Note: Periodic Payments of Interest With Lump-Sum Principal Payment
    • LLC Promissory Note: Lump-Sum Payment of Principal and Interest on Specified Date
    • LLC Promissory Note: Lump-Sum Payment of Principal and Interest on Demand by Noteholder
    • LLC Promissory Note: Non-Uniform Schedule of Payments of Principal and Interest

    Loans by the LLC

    • Approval of LLC Loan to Insider
    • Individual Promissory Note: Installment Payments of Principal and Interest (Amortized Loan)
    • Individual Promissory Note: Installment Payments of Principal and Interest (Amortized Loan) Secured by Property
    • Individual Promissory Note: Installment Payments of Principal and Interest (Amortized Loan) With Balloon Payment
    • Individual Promissory Note: Periodic Payments of Interest With Lump-Sum Principal Payment
    • Individual Promissory Note: Lump-Sum Payment of Principal and Interest on Specified Date
    • Individual Promissory Note: Lump-Sum Payment of Principal and Interest on Demand by Noteholder
    • Individual Promissory Note: Non-Uniform Schedule of Payments of Principal and Interest
    • Release of Promissory Note

    Self-Interested Business Dealings between the LLC and Its Members or Managers

    • LLC Approval of Transaction Benefiting a Member or Manager
  • About the Author
    • Anthony Mancuso

      Anthony Mancuso is a California corporations and limited liability company expert. A graduate of Hastings College of the Law in San Francisco, Tony is an active member of the California State Bar, writes books in the fields of corporate and LLC law, and has studied advanced business taxation at Golden Gate University in San Francisco. He has also been a consultant for Silicon Valley EDA (Electronic Design Automation) and other technology companies. He is currently employed at Google.

      Tony is the author of many Nolo books on forming and operating corporations (both profit and nonprofit) and limited liability companies. Among his current books are The Corporate Records Handbook, How to Form a Nonprofit Corporation, Form Your Own Limited Liability Company, and LLC or Corporation? His books have shown businesses and organizations how to form a corporation or LLC for decades. Tony is also a licensed helicopter pilot and guitarist.

  • Table of Contents
  • Your LLC Companion

    • Why You Should Record Key LLC Decisions
    • Who Should Use This Book
    • How to Use This Book
    • When to Consult a Professional

    1. LLC Documents

    • Organize Your LLC Records
    • Basic LLC Documents

    2. Using Meetings, Minutes, and Written  Consents

    • Three Ways to Make and Document Formal LLC Decisions
    • How Your Management Structure Affects Decision-Making Requirements
    • Questions and Answers About LLC Meetings, Minutes, and Written Consents

    3. Steps to Take Before Holding a Meeting

    • Types of LLC Meetings
    • Steps to Prepare for a Meeting

    4. How to Hold an LLC Meeting

    5. How to Prepare Written Minutes of LLC Meetings

    • When to Prepare Minutes
    • Preparing the Minutes Form

    6. How to Hold a Paper LLC Meeting

    • Decide Whether to Hold a Paper Meeting
    • How to Prepare Minutes of Paper LLC Meetings

    7. How to Take Action by Written Consent Without an LLC Meeting

    • Step 1. Check Your Operating Agreement for Any Written Consent Rules
    • Step 2. Prepare Written Consent Form
    • Step 3. Place Signed Consent Forms in Your LLC Records Binder

    8. Standard LLC Business Resolutions

    • When to Use Resolutions Discussed in This Chapter
    • Bank Account Resolutions
    • Assumed or “Fictitious” LLC Name Resolution
    • Resolution to Approve an LLC Contract
    • Real Property Resolutions
    • Delegation of Authority and Approval of Individual Contracts
    • Certification, Affidavit, or Acknowledgment of LLC Decision or Document

    9. LLC Tax Resolutions

    • LLC Corporate Tax Treatment Election
    • Resolution for Approval of Independent Audit
    • Approval of LLC Tax Year

    10. Resolutions to Amend the LLC Articles and Operating Agreement

    • Decide Whether You Need to Amend Your Articles or Your Operating Agreement
    • Amending Articles of Organization
    • Amending the LLC Operating Agreement

    11. LLC Membership Resolutions

    • Distributions of LLC Profits to Members
    • Additional Capital Contributions by Members
    • Admitting LLC Members
    • Withdrawal of LLC Members

    12. LLC Hiring and Compensation Resolutions

    • Approving Salaries for Members and Employees
    • Using Independent Contractors
    • Appointing and Paying Officers
    • Compensation for Attending LLC Meetings
    • Indemnification for Members, Managers, Officers, and Employees

    13. Loans to the LLC

    • Bank Loans to the LLC
    • Loans to the LLC by Members and Other Insiders
    • Promissory Notes Overview
    • Promissory Notes for Loans to LLC

    14. Loans by the LLC

    • Overview of Loans to Insiders
    • Legal Considerations for Loans to Insiders
    • Tax Consequences of Insider Loans
    • Resolution for LLC and Member Approval of LLC Loans to Insiders
    • Promissory Notes for Loans by LLC
    • Release of Promissory Note

    15. Self-Interested Business Dealings Between the LLC and Its Members or Managers

    • Legal Duties Owed by Members and Managers
    • Resolution for Approval of Member or Manager Self-Interested Business Deals

    16. Lawyers, Tax Specialists, and Legal Research

    • How to Find the Right Lawyer
    • Finding the Right Tax Adviser
    • How to Do Your Own Legal Research


    Appendix A: Accessing This Book’s Downloadable Forms on the Nolo Website

    • How to Access the Minutes Forms and Resolutions
    • Files Provided on Nolo’s Website

    Appendix B: How to Locate State LLC Offices and Laws Online

    • How to Locate State LLC Offices Online
    • How to Locate Your State’s LLC Act Online



  • Sample Chapter
  • Introduction:
    Your LLC Companion

    Congratulations—you’ve formed a limited liability company (LLC)! Running your business as an LLC gives you limited liability for business debts (like a corporation) but allows you to avoid some of the legal formalities and tax rules that apply to corporations. It’s one of the most flexible—and efficient—ways small business owners can structure their business.

    To get your LLC up and running, you’ve already had to complete some essential start-up tasks: preparing and filing articles of organization (called a “certificate of organization” in some states) and preparing and signing an LLC operating agreement. Once these documents are completed and the initial membership interests are sold to the founders and initial investors, you may be tempted to forgo any further formalities and get back to doing what you do best—running the day-to-day business.

    You can’t simply keep running your business exactly as you did before you formed an LLC, however. There are a few new formalities and paperwork requirements you should observe to keep proper records of important LLC decisions, transactions, and meetings. This will protect your LLC status and keep members, managers, and others apprised of the LLC’s activities. This book will help you take care of these formalities, quickly and easily. It provides all of the forms and advice you’ll need to:

    • hold and document LLC managers’ and members’ meetings
    • document actions taken by managers and members without having met, and
    • approve common ongoing LLC legal, tax, and business decisions.

    Why You Should Record Key LLC Decisions

    If you don’t take the time to properly memorialize important decisions and meetings, you could run into trouble. You can lose crucial tax benefits if you fail to properly document and support important tax decisions and elections. Even worse, ignoring the legal technicalities of running your LLC may jeopardize its legal existence as a separate business entity, which means that you could be held personally liable for LLC debts. And, of course, as time passes and memories fade, the reasons important LLC decisions were made, and the extent of each member’s or manager’s participation in these decisions, may be forgotten. This can lead to controversy and dissension, even in the ranks of a closely held LLC, unless you use written minutes, consent forms, and resolutions to keep track of all important LLC decisions and votes.

    Here are some reasons why you should record important LLC decisions:

    • Annual LLC meetings may be required under your state law. If you fail to pay at least minimal attention to this and other ongoing legal formalities, you may lose the protection of your LLC limited liability status. If this happens, LLC members can be held personally liable for the debts of the LLC.
    • The paperwork you create will provide a record of important LLC transactions. This “paper trail” can be important if disputes arise. It will show your managers, members, creditors, and suppliers, as well as the IRS and the courts, that you acted appropriately and in compliance with legal requirements.
    • Formally documenting key LLC actions is a surefire way to keep all members informed of major LLC decisions, particularly those who don’t manage the business day to day.
    • Owners of small LLCs commonly approve business transactions in which they have personal, material, or financial interests. Your minutes or consent forms can help prevent legal problems by proving that these “self- interested” decisions were arrived at fairly, after careful consideration of the issues and full disclosure to the disinterested owners.
    • Institutions like banks, trust companies, escrow companies, title companies, and property management companies may refuse to do business with your LLC unless you submit a copy of a manager or membership resolution approving the transaction in question. If you want to take out a loan or purchase or rent property, for example, you may have to provide a resolution authorizing the transaction.

    You don’t need to document routine business decisions—only those that require formal manager or membership approval. In other words, you don’t have to clutter up your LLC records binder (see Chapter 1) with records of decisions to purchase supplies or products, maintain or improve services or products, or other day-to-day issues.

    However, key legal, tax, and financial decisions absolutely should be acted on and recorded by your managers and/or members. For example, you’ll want to keep records of:

    • the proceedings of annual meetings of managers and/or members
    • the admission of a new member by the LLC
    • the buyback of an existing membership interest by the LLC
    • the purchase of real estate
    • the authorization of a significant loan or substantial line of credit, and
    • important federal or state tax elections.

    These and other important decisions should be made by your managers and/or members and backed with legal paperwork. That way, you’ll have solid documentation if key decisions are questioned or reviewed later by managers, members, creditors, the courts, or the IRS.

    COVID-19 Relief Measures for Businesses and Individuals

    The federal CARES Act, which expired at the end of 2020, addressed challenges faced by small businesses as a result of the COVID-19 pandemic social and economic shutdown. For example, under the Act’s Paycheck Protection Program (PPP), eligible small business owners could apply for loan funds to help them maintain payroll, hire back laid-off employees, and cover applicable overhead. In some cases, loan funds did not need to be repaid. Also, the IRS provided employer tax credits and relaxed filing deadlines during the COVID-19 crisis. States also provided small business relief, for example by delaying tax filing deadlines and waiving entity filing fees.

    The federal American Rescue Plan Act of 2021 provided COVID-19 relief measures for individuals, which included direct stimulus payments, extended unemployment compensation, eviction and foreclosure moratoriums, and the refund of an increased Child Tax Credit.

    You can search online for information on the latest federal and state COVID-19 related benefits using the following links:

    • Small Business Administration (SBA) website at
    • U.S. Department of the Treasury website at
    • IRS website at, then enter “Coronavirus Tax Relief for Businesses and Tax-Exempt Entities” in the site search box, or
    • your state Secretary of State and Tax Agency websites (see Appendix B) for state COVID-19 financial and tax relief programs.


    Who Should Use This Book

    Although all LLCs should formally record important decisions, some may need more help than this book provides. This book is for smaller LLCs—those that are privately owned and have a manageable number of members (up to about 35) and employees (up to about 50)—whose members and managers can work together without a great deal of controversy. A typical example is a family-owned LLC or an LLC that is owned by several people.

    If your LLC is larger you will have to contend with a wider variety of viewpoints— and may not be able to count on the cooperation of all members in making or documenting decisions. Similarly, if a significant number of your LLC’s members don’t participate in the day-to-day management of the business, you’ll need to use procedures that keep these members informed of LLC actions. The procedures described in this book won’t be sufficient for LLCs that have to contend with a lot of disagreement among members or have to spend significant time and energy apprising far-flung, uninvolved members of the LLC’s activities.

    How to Use This Book

    This book explains, step by step, how to document important LLC decisions, votes, and transactions. You’ll learn how to hold meetings and create the minutes, written consent forms, and resolutions necessary to record LLC business.

    Managers and Members in a Small LLC

    In every business, someone must be responsible for managing the day-to-day affairs of the company, and the LLC is no exception. There are two types of LLC management structures. In a member-managed LLC, all members are responsible for managing the business; most small LLCs take this form. In a manager-managed LLC, the business is managed by just some (not all) of its members, or is managed by one or more managers who are not LLC members.

    This book refers to “managers’ meetings” and “members’ meetings.” However, if your LLC is member-managed, then you don’t have to hold separate managers’ meetings to approve LLC decisions—a members’ meeting will do. If your LLC is manager- managed, then you should hold separate managers’ and members’ meetings to approve important LLC decisions. After all, you want to make sure that all owners (all members) agree with the important decisions made by the management team.


    You can handle most of this routine paper- work yourself, using the forms and instructions provided with this book. And, as explained in Chapter 2, LLC owners don’t necessarily have to get together in person every time you have to make an important decision—you may also be able to approve LLC business through written consents or minutes. (The methods you can use depend on your state’s law—Appendix B explains where to find state-by-state LLC rules.) The information in this book will help you decide which approval method to use and how to prepare the necessary records.

    The paperwork you’ll need to complete consists of minutes and written consent forms for members and managers, together with resolution forms that are inserted into the minutes or consent forms to show approval of various types of LLC actions. To help you complete these forms, you’ll find detailed instructions and samples in each chapter. All of the forms are included on Nolo’s website on the companion page for this book (see Appendix A for the link).

    However, you won’t have to read the whole book cover to cover to get the information you need. Start by reading Chapters 1 and 2, which explain some basics about LLCs and the options you have for making decisions. Armed with this information, you can decide whether to document the particular decision you’re facing by (1) holding an actual meeting of your members and/or managers, (2) preparing minutes for a meeting that doesn’t actually occur (called a “paper meeting”), or obtaining the written consent of your members and/or managers to the action or decision at hand.

    • If you decide to hold a real meeting of your managers and/or members, follow the steps covered in Chapters 3 and 4 to prepare for and hold the meeting. Then prepare the appropriate minutes form to document the decisions taken at the meeting, following the step-by-step instructions in Chapter 5.
    • If you opt for a “paper” meeting—one that occurs on paper only but reflects the real decisions of your managers and members— follow the instructions for creating minutes for a paper meeting in Chapter 6.
    • To document a particular decision by preparing written consent forms to be signed by the managers and/or members, follow the instructions in Chapter 7.
    • If a business deal or transaction should be approved—and is covered by—a resolution discussed in this book (Chapters 8 through 15), fill in the resolution form following the instructions contained in the appropriate chapter, then place or paste the completed resolution into your minutes or consent form. (See Appendix A for a list of resolution forms included on Nolo’s website, with a cross-reference to the chapter and section of the book that contains instructions for preparing each resolution.)

    When to Consult a Professional

    Small, privately held LLCs routinely hold LLC meetings and prepare standard resolutions and other legal paperwork. However, you may occasionally face a more complicated decision that has important legal, tax, or financial ramifications—and in this situation, you should get some professional advice. Please see a tax or legal specialist before using the forms provided with this book if:

    • the decision you are facing is complex
    • you anticipate any complications or objections, or
    • you simply have questions and need more information.

    A consultation of this sort will be far more cost-effective than making the wrong decision and having to fix it later. For information on choosing and using a legal or tax professional, see Chapter 16

    We hope you enjoyed this sample chapter. The complete book is available for sale here at

  • Forms
  • This Book Comes With a Website

    Nolo’s award-winning website has a page dedicated just to this book, where you can:

    DOWNLOAD FORMS - All forms in this book are accessible online. After purchase, you can find a link to the URL in Appendix A.

    KEEP UP TO DATE - When there are important changes to the information in this book, we will post updates

    And that’s not all. contains thousands of articles on everyday legal and business issues, plus a plain-English law dictionary, all written by Nolo experts and available for free. You’ll also find more useful books, software, online services, and downloadable forms.

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