Operating Agreement LLC Kansas

A Kansas Limited Liability Company (LLC) Operating Agreement is an internal document that explains how the company will operate. It outlines ownership interests, defines management responsibilities, and sets the rules members will follow in making business decisions. Some refer to it as a Kansas Operating Agreement or Kansas LLC Company Agreement. Regardless of the title used, it serves as the company’s primary internal governance document.

Many LLCs in Kansas prepare this agreement during the formation process, while others adopt one later. The Operating Agreement is not filed with the state and remains part of the LLC’s permanent records.

Is a Kansas Operating Agreement Required?

Kansas does not require LLCs to maintain an Operating Agreement. Under the Kansas Revised Limited Liability Company Act, an Operating Agreement may be written, oral, or implied. Although optional, a written Operating Agreement is strongly recommended. Without one, the LLC defaults to state statutory provisions, which may not reflect the members intended structure or financial arrangements.

Why a Kansas Operating Agreement Matters

Helps preserve limited liability protections

A written Operating Agreement helps show that the LLC operates separately from its members. Courts may review internal documentation when deciding whether limited liability protections apply, especially for single member LLCs.

Clarifies management and financial rules

Kansas’ statutory default rules apply only when no Operating Agreement exists. A written agreement allows members to define management duties, voting rules, financial practices, and dispute-resolution procedures.

Required by financial institutions and advisers

Banks, lenders, accountants, and attorneys frequently request an Operating Agreement to verify ownership and confirm who has authority to act on behalf of the LLC.

Supports Kansas annual report compliance

Kansas LLCs must file an annual report every year to remain in good standing. Assigning responsibility for this filing within the Operating Agreement helps the business stay compliant.

Key Provisions to Include in a Kansas Operating Agreement

Basic Company Details

LLC name
Business purpose
Principal office address
Duration of the LLC
Federal tax classification

Kansas requires LLC names to include Limited Liability Company, LLC, or a permitted abbreviation.

Registered Agent and Office

Name and Kansas street address of the registered agent
Procedures for changing the registered agent
Filing obligations with the Kansas Secretary of State

Member Information

Names and mailing addresses of all members
Ownership percentages
Initial capital contributions

Capital Contributions

Description of contributions made by each member
Rules for future or additional contributions
Statement that contributions do not earn interest unless agreed

Management Structure

Whether the LLC is member managed or manager managed
Duties and authority of members or managers
Procedures for appointing or removing managers

Profit and Loss Allocation

Allocation method for profits and losses
Conditions and timing for distributions
Confirmation that distributions may only occur if the LLC can satisfy its obligations when due

Tax Election

Federal tax classification selected by the LLC
Statement that certain elections require additional IRS filings

Voting Procedures

Voting rights of members
Quorum requirements
Vote thresholds required for decision making

Kansas LLCs commonly use ownership-percentage voting unless modified in the agreement.

Transfers of Interest

Rules for voluntary and involuntary transfers
Admission procedures for new members
Treatment of interests when a member withdraws, dies, or is expelled

Records and Bookkeeping

Procedures for maintaining financial and operational records
Assignment of responsibility for filing Kansas annual reports
Statement that failure to file may result in penalties or administrative dissolution

Compensation

Rules for compensating members, managers, or officers
Reimbursement policies for business expenses

Dissolution

Events that may cause dissolution
Steps for properly winding up the LLC
Filing a Certificate of Cancellation with the Kansas Secretary of State

Amendments

Procedures for modifying the Operating Agreement
Requirement that amendments be made in writing unless stated otherwise

Management Options for Kansas LLCs

Member Managed

Members run daily operations and have authority to act for the company. This structure is common for smaller or closely held LLCs. Voting power often corresponds to ownership percentages unless changed in the agreement.

Manager Managed

Members appoint one or more managers to handle day-to-day activities. Managers may be members or outside individuals. Members retain decision-making authority for major issues.

Creating and Maintaining the Kansas Operating Agreement

Drafting and Signing

The Operating Agreement becomes effective once adopted by the members. Although Kansas recognizes written, oral, and implied agreements, a written version helps prevent disputes and provides consistency.

Recordkeeping

The agreement should be stored with the LLC’s permanent records. Kansas requires annual filings, so maintaining accurate documents is important for compliance.

Amending the Agreement

Members may revise the Operating Agreement by following the amendment procedures described in the document. If changes affect information filed with the state, the LLC must update records with the Kansas Secretary of State.