A Puerto Rico operating agreement is a legal document that that formalizes the rules and procedures for an LLC. Your operating agreement serves as a legally binding contract between your members, establishing important processes for your LLC, including voting, allocation of profits and losses, transfer of membership interest, and dissolution. You can use one of our attorney-drafted templates to fill out, save, and download your operating agreement for free.
Unlike the Puerto Rico Certificate of Formation, an operating agreement is an internal document, which means you don’t need to file it with the Puerto Rico Department of State. However, having a strong operating agreement is extremely important for Puerto Rico LLCs, and we at Northwest want to help you get started. That’s why Northwest offers a range of free, attorney-drafted Puerto Rico operating agreement templates.
You can think of your operating agreement as the legal blueprint for your LLC. You’re free to cover almost any topic in your operating agreement that doesn’t run counter to Puerto Rico law, but don’t forget to include these key subjects:
Want to focus on your business and leave the legal hullabaloo to us? Our lawyers drafted a comprehensive operating agreement you can use for free. You can even fill it out on this page, save it in a free account for later, and download a completed draft to sign.
In order to fill out our free operating agreement template, you’ll need your:
This must be your business’ legal entity name, or the name you put on your LLC Articles of Organization.
Did an LLC member contribute $500? $5k? A storefront? Put that here.
You’ll just write in 16 here since our version has a set amount of pages.
Remember, this is an internal document, so you won’t have to submit these names to the state just because they’re on here. However, you might need to add these people to your BOI Report.
Include any initial contributions, even if it’s only a small percentage.
While we recommend having a business bank account, some banks like to actually see the operating agreement before you open the account. If that’s the case, you can leave this blank for now.
This is the place your business operates from.
You can add this in later if you aren’t sure when your meeting will be held.
There’s a few different spots where you’ll need to add at least one members’ signature. These are on pages 13, 14, 15, and 16 on our template.
A Puerto Rico LLC should have an operating agreement because a company cannot act for itself. In order to operate, LLCs require real humans (and other entities) to carry out company operations.
Puerto Rico doesn’t legally require LLCs to enter into an operating agreement. But even though it’s not required, adopting an operating agreement is in your company’s best interest.
In Puerto Rico, you can choose to protect your privacy by not listing members’ names on the Certificate of Formation. The only problem is that when you need to prove you own your business, like to open a business bank account or convince someone to invest in your LLC, you won’t be able to prove ownership with the Certificate of Formation alone. That’s when it helps to have an operating agreement, which lists information for all of your members.
In order to maintain limited liability, an LLC must demonstrate that it is legally separate from its members. One action that helps you do this is adhering to a written operating agreement that documents your LLC’s rules and structure. If your LLC is ever sued, an operating agreement could be the pivotal weapon in your defense.
Every once in a while, your LLC members may disagree on an important issue. When this happens it helps to consult your operating agreement, which plans for a range of major situations.
If you don’t have an operating agreement, your LLC will be governed by Puerto Rico’s default LLC statutes. These statutes might be different from the rules you want for your LLC. With a customized operating agreement, you can create rules that make sense for your LLC structure.
We asked our lawyers for an example of how an operating agreement can make or break your LLC. Here’s what they said.*
“Consider the case of Begley v Fullana-Morales, where the LLC did have an operating agreement, however the disputing members seemingly failed to actually recognize the dispute resolution process spelled out in the operating agreement. As a result, when one member attempted to seek judicial intervention into the LLC internal affairs, the court easily sided with the other members who sought dismissal of the legal action. The members seeking dismissal pointed out that the operating agreement of the LLC explicitly spelled out a process for resolving disputes which included mediation and arbitration prior to bringing an action to the courts. Looking to the clear and unambiguous language of the operating agreement, the courts promptly dismissed the action and ordered the members to resolve their disputes pursuant to the process(es) outlined in their LLC operating agreement.
“Had the members taken the time to plan ahead, discuss potential pain points, and distill their collective understanding into a written operating agreement, and periodically reviewed that operating agreement for continued clarity and understanding, then this dispute could have been resolved internally (if not avoided completely), and valuable resources could have been preserved for other more fulfilling commercial purposes.”
Our LLC operating agreements are written by an attorney and work for a range of situations. Find the one that best suits your LLC below.