A Colorado multi-member LLC operating agreement is completed by the owners (called “members”) of a limited liability company to define the rules under which the entity will function. It allows the members to conceive their own management policies, enabling them to bypass the default rules imposed by state law. These provisions will address bookkeeping, banking, tax filing, financial distributions, and various other aspects of the company’s internal affairs.
Colorado, like most states, does not require LLCs to execute an operating agreement, although it is still a good idea to have one. In fact, it may be necessary to have an operating agreement to prove the company’s validity to financial institutions or investors.