Wyoming LLC Operating Agreement

• Identification: LLC name, formation date, principal business address, registered agent.
• Members and ownership percentages: who owns what fraction.
• Management structure: member-managed (each member can act for the LLC) vs manager-managed (designated manager has authority).
• Capital contributions: initial capital, additional capital calls, who is required to contribute.
• Profit and loss allocation: typically pro rata to ownership, but can be different (e.g., special allocations for early-stage investors).
• Distributions: when distributions are made, who decides, distribution waterfalls if more complex.
• Voting rights and decision thresholds: what requires majority vs unanimous consent vs supermajority.
• Transfer of interests: restrictions on selling membership, right of first refusal, drag-along and tag-along provisions.
• Admission of new members: process for adding members later.
• Dissolution events: what triggers winding up.
• Indemnification: protection for members and managers acting in good faith.
• Charging-order language: confirms charging order is the exclusive remedy for member creditors (essential for Wyoming asset protection under Section 17-29-503).
• Tax treatment election: confirms pass-through (default) or C-Corp election if applicable.
• Dispute resolution: arbitration, mediation, or court jurisdiction clauses.
• Death or incapacity of a member: what happens to membership interest.

• Default to Delaware or California provisions that do not match Wyoming statute (Title 17, Chapter 29).
• Miss the Wyoming-specific charging-order language that strengthens asset protection. Generic templates reference state of formation generically; Wyoming-specific language explicitly invokes Section 17-29-503 as the exclusive remedy for member creditors.
• Miss single-member protection provisions that maintain the LLC-vs-owner separation under audit or litigation.
• Use outdated FinCEN BOI references (pre-March 2025 rule change). Many templates still reference BOI compliance as if it were active.
• Use generic dissolution events that do not work for a non-resident-owned entity (e.g., automatic dissolution on death of single member, which can be problematic).
• Lack proper foreign-owner provisions for IRS Form 5472 mechanics, ECI position, and treaty considerations.
• Use ambiguous capital account maintenance language that fails for partnership tax purposes in multi-member structures.
• Skip indemnification at maximum permissible levels under Wyoming statute.

Single-member LLC:

• Default tax treatment: disregarded entity for US federal tax (pass-through to the owner, treated as "not a separate entity" for tax purposes under Treas. Reg. 301.7701-3)
• Operating agreement is simpler but still essential for asset protection
• Must establish the LLC as separate from the owner personally (corporate formalities, separate bank account, distinct decisions) to preserve liability protection
• Wyoming charging-order protection (Section 17-29-503) is at its strongest for single-member LLCs (statute updated specifically to ensure single-member protection in 2009 amendments)
• No risk of partnership tax disputes since there is only one member
• Form 5472 + pro forma 1120 annual IRS filing

Multi-member LLC:

• Default tax treatment: partnership for US federal tax (Form 1065, K-1s to each member)
• Operating agreement is more complex: ownership splits, profit allocations, voting thresholds, member admission/withdrawal, dispute resolution, buy-sell triggers
• Wyoming charging-order protection still applies but member rights and obligations to each other become important
• Capital account maintenance per Internal Revenue Code Section 704(b) for partnership tax (substantial economic effect rules)
• Form 1065 instead of Form 5472 (different tax form)
• K-1 issued to each member showing their share of partnership income

WyomingLLC adapts the operating agreement template to whichever structure matches your intake form.

1. Charging order is exclusive remedy. Explicit reference to Wyoming Statutes Section 17-29-503. Confirms that a creditor of a member can only get a charging order against distributions, not the LLC interest itself, not the LLC assets.
2. Indemnification of members and managers. Maximum permissible under Wyoming statute (Section 17-29-408).
3. Member voting on dissolution. Requires affirmative member vote (not automatic on death or withdrawal). This is important for single-member LLCs where the death of the sole member could otherwise trigger automatic dissolution.
4. Foreign-owner provisions. References to Form 5472 mechanics, ECI position, and treaty considerations.
5. Separation language. Explicit statements that LLC and members are separate, supporting corporate formalities under audit or litigation.
6. Operating agreement supersedes default rules. The Wyoming LLC Act provides default rules where the operating agreement is silent. We make sure your agreement is comprehensive so default rules rarely apply.
7. Member transfers restrictions. Default rules in many states allow free transfer of LLC interests, which can defeat the LLC's purpose. We include restrictions and right of first refusal.
8. Books and records. Where and how the LLC's records are maintained (under Section 17-29-410).
9. Capital account language for multi-member LLCs. Substantial economic effect language under IRC Section 704(b) so partnership tax allocations are respected.

• When a member joins or leaves: amend with new member identification and ownership percentages.
• When ownership percentages change: amend allocation schedule.
• When management structure changes (member-managed to manager-managed): amend management section.
• When you elect C-Corp tax treatment (rare for non-residents): amend tax treatment provisions.
• When you raise capital from outside investors: amend to include investor protections, preferred units, etc.
• When the legal landscape changes (e.g., new Wyoming statute, new IRS regulation): update to remain compliant.
• Process: amend in writing, sign by all members, keep on file. No state filing required.

• Mercury, Relay, Wise Business: sometimes request the operating agreement during KYC, especially for multi-member LLCs.
• Investors: read the operating agreement before investing or providing convertible notes. They look for: voting rights, transfer restrictions, drag-along/tag-along, indemnification, dispute resolution.
• Courts: in any dispute (lawsuit, divorce, creditor action), the operating agreement is the primary evidence of LLC structure and member intent.
• IRS: in an audit, the operating agreement supports your tax treatment elections.
• Vendors and clients: occasionally request to verify you have authority to sign as a member or manager.
• Future acquirers: in M&A due diligence, the operating agreement is a core document. Sloppy operating agreements can reduce sale price or block deals.

Wyoming law (Section 17-29-110) does not require an operating agreement to exist for the LLC to be valid. If you do not have one, Wyoming default rules under Title 17, Chapter 29 apply.

Default rules are reasonable but not optimized:

• Members vote on most matters by majority
• Profit and loss allocated pro rata to capital contributions
• Members can act for the LLC unless manager-managed is specified in Articles of Organization
• Member can transfer interest by default unless restricted (this is bad for asset protection in some scenarios)
• Charging order is exclusive remedy by default (Section 17-29-503 is statutory and applies even without an operating agreement)

Asset protection in single-member LLCs is meaningfully weaker without a written operating agreement because there is no documented separation between the LLC and the owner. Courts can argue alter ego doctrine more easily.