Kentucky LLC operating agreement
The internal contract that governs how your Kentucky LLC runs — management, money, and what happens when a member leaves.
What it is
A Kentucky LLC operating agreement is the internal contract among the members (owners) of a limited liability company — how the company is managed, who contributed what, how profits are distributed, how decisions are voted, and what happens when a member exits. Under KRS 275.015(21), the operating agreement is an agreement among all of the members; for a single-member company it includes a writing executed by that sole member.
Kentucky's LLC Act (KRS Chapter 275) is a freedom-of-contract statute: it supplies default rules and gives maximum effect to the choices your operating agreement makes, with a floor it never lets you waive — the obligation of good faith and fair dealing (KRS 275.003(7)). The Act's defaults are generic, and most of them are the wrong choice for most businesses; the operating agreement is where you replace them with terms that fit your company.
What's in it
Company identification matched to your filed articles of organization. The articles form the company (KRS 275.020) — the operating agreement does not — and the management election must be consistent with them: a Kentucky LLC is member-managed by default and manager-managed only if the filed articles say so (KRS 275.165; KRS 275.025(1)(d); KRS 275.135). If your answers and your articles disagree, D. Elton Johnson reconciles them before delivery.
A members schedule each member signs — name, capital contribution, and percentage interest. Contributions may be cash, property, or services (KRS 275.195), and a member's promise to contribute is enforceable only if set out in a writing signed by that member (KRS 275.200).
Management and voting terms (the default is a majority-in-interest of the members, voting in proportion to contributions, unless your agreement chooses differently — KRS 275.175); distributions; duties of care and loyalty within the statutory bounds (KRS 275.170; KRS 275.180 — never reaching a person's own negligence, wrongful acts, or misconduct per KRS 275.150(3)); a written-amendment-only clause (KRS 275.177); and, for multi-member companies, the buy-sell terms the members choose.
Who needs it
Single-member: $199. Multi-member: $399. A multi-member operating agreement is a materially different document — one agreement among all of the company's owners, with buy-sell and member-relationship terms a single-member company doesn't have. D. Elton Johnson's Kentucky-attorney review is mandatory and included in both prices; every operating agreement is reviewed before it reaches you, and the buy-sell terms in a multi-member agreement get his particular attention.
What this document is not: it does not form your company (that's the articles of organization filed with the Secretary of State, KRS 275.020), and it is not tax advice — allocations, elections, and self-employment-tax questions belong with your CPA or tax advisor. Multi-partner businesses with complex buy-sell or succession needs sometimes call for individually-tailored attorney drafting instead — reach out to D. Elton Johnson first if that sounds like your situation.
Kentucky statute
Kentucky Limited Liability Company Act, KRS Chapter 275. KRS 275.003 (freedom of contract — maximum effect to the operating agreement; the good-faith-and-fair-dealing obligation may not be eliminated, KRS 275.003(7)) + KRS 275.015(21) (what an operating agreement is) + KRS 275.020 (the company is formed by filing articles of organization — not by this agreement) + KRS 275.165 / KRS 275.025(1)(d) / KRS 275.135 (member-managed by default; manager-managed only when the filed articles so elect) + KRS 275.150 (the liability shield, and its bound: a person's own negligence, wrongful acts, or misconduct) + KRS 275.170 / KRS 275.180 (duties of care and loyalty, and how far a written agreement may adjust them) + KRS 275.175 (voting defaults) + KRS 275.195 / KRS 275.200 (capital contributions; the signed-writing rule) + KRS 275.177 (non-written side agreements void where the agreement requires written amendments).
What happens after you start
Your draft is assembled from your answers, reviewed by D. Elton Johnson before delivery, and sent to you via secure one-time-use download link. The delivery includes the document itself, a Kentucky-specific wet-ink execution instructions packet, and a receipt.
The information on this page is general — it is not legal advice for your specific situation. Bluegrass Cornerstone is a service of Johnson Legal PLLC, a Kentucky law firm. When you engage Cornerstone, you engage Johnson Legal PLLC under a standard attorney-client relationship.
Steps to finalize
All members sign and date the member-signatures section — the agreement is a binding contract once all members have signed (for a single-member company, the sole member signs). Each member also signs the members schedule, because a promise to contribute capital is enforceable only in a writing signed by that member (KRS 275.200).
Notarization is not required for an operating agreement to be valid — it's optional if a bank, lender, or title company asks for an acknowledged copy. The agreement is not recorded with any county clerk or the Secretary of State. Keep the signed original with the company records at your principal office; each member keeps a signed copy.