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Indiana Single-Member Operating Arrangement

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Single-Member Operating Arrangement of Limited Liability Company

State of Indiana

THIS OPERATING ARRANGEMENT is hereby established, this the day of , 20 , by the Initial Member.

The Initial Member contemplates that additional Members may join the limited liability company in the future, and the following Operating Arrangement has therefore been developed.

ARTICLE I

FORMATION OF LIMITED LIABILITY COMPANY

1. Formation of LLC. The Initial Member has formed a limited liability company in the State of Indiana named ("LLC"). The operation of the LLC shall be governed by the terms of this Arrangement and the applicable laws of the State of Indiana relating to the formation, operation and taxation of a LLC.

2. Articles of Organization. The Initial Member has caused to be filed Articles of Organization, (“Articles”) of record with the state, thereby creating the LLC.

3. Business. The business of the LLC shall be:

a)

and

b) To conduct or promote any lawful businesses or purposes that a limited liability company is legally allowed to conduct or promote, within this state or any other jurisdiction.

4. Registered Office and Registered Agent. The registered office and place of business of the LLC shall be and the registered agent at such office shall be .

5. Duration. The LLC will commence business as of the date of filing its Articles and will continue in perpetuity.

6. Fiscal Year. The LLC's fiscal and tax year shall end December 31.

ARTICLE II

MEMBERS

7. Initial Member. The Initial Member of the LLC is .

8. Additional Members. The first new Member, or new Members if several are to be added simultaneously, may be admitted only upon the approval of the Initial Member.

ARTICLE III

MANAGEMENT

9. Management. The Initial Member shall manage the LLC, and shall have authority to take all necessary and proper actions to conduct the business of the LLC. Anyone authorized by the Initial Member may take any authorized action on behalf of the LLC.

ARTICLE IV

CONTRIBUTIONS, PROFITS, LOSSES, AND DISTRIBUTIONS

10. Interest of Members. Each Member shall own a percentage interest in the LLC.

11. Initial Contribution. The initial contribution of the Initial Member is $ , representing a 100% interest in the LLC.

12. Additional Contributions. In the event additional Members are added, upon a majority vote, the Members may be called upon to make additional cash contributions as may be necessary to carry on the LLC's business.

13. Record of Contributions/Percentage Interests. A record shall be kept of all contributions to, and percentage interests in, the LLC.

14. Profits and Losses. The profits and losses and all other tax attributes of the LLC shall be allocated to the Initial Member until such time as additional Members are added.

15. Distributions. Any Distributions of cash or other assets of the LLC shall be made as determined by the Initial Member, or by a majority of the Members if additional Members are added.

16. Change in Interests. If there is a change in a Member's percentage interest, the Member's share of profits and losses and distributions in that year shall be determined under a method which takes into account the varying interests during the year.

ARTICLE V

VOTING; CONSENT TO ACTION

17. Voting by Members. Until such time as additional Members are added, all decisions will be made by the Initial Member.

18. Majority Defined. As used throughout this agreement the term “majority” of the Members shall mean a majority of the ownership interest of the LLC.

19. Majority Required. Any action that requires the vote or consent of the Members may be taken upon a majority vote of the Members unless unanimous consent is required by this Arrangement.

20. Meetings - Written Consent. Action of the Members or Officers may be accomplished with or without a meeting.

21. Meetings. Meetings of the Members shall be held as determined by the Members or as may be called by a majority of the Members.

ARTICLE VI

DISSOCIATION OF MEMBERS

22. Termination of Membership. A Member’s interest in the LLC shall cease upon the occurrence of one or more of the following events:

(a) A Member withdraws by giving the LLC thirty (30) days written in advance of the withdrawal date.

(b) A Member assigns all of his/her interest to a qualified third party.

(c) A Member dies.

(d) There is an entry of an order by a court of competent jurisdiction adjudicating the Member incompetent.

(e) In the case of an estate that is a Member, the distribution by the fiduciary of the estate's entire interest in the LLC.

(f) In the case of an entity that is a Member, the distribution upon dissolution of the entity’s entire interest in the LLC.

(g) A Member, without the consent of a majority of the Members, engages in bankruptcy or creditor-related actions.

(h) If within one hundred twenty (120) days after the commencement of any action against a Member seeking reorganization, the action has not been dismissed and/or has not been consented to by a majority of the Members.

(i) If within ninety (90) days after the appointment of a trustee, receiver, or liquidator, the appointment is not vacated and/or has not been consented to by a majority of the Members.

(j) Any of the events provided in applicable provisions of state or federal law that are not inconsistent with the dissociation events identified above.

23. Effect of Dissociation. Any dissociated Member shall not be entitled to receive the fair value of his LLC interest solely by virtue of his dissociation.

ARTICLE VII

RESTRICTIONS ON TRANSFERABILITY OF LLC INTEREST; SET PRICE FOR LLC INTEREST

24. LLC Interest. The LLC interest is personal property. A Member has no interest in property owned by the LLC.

25. Encumbrance. A Member can encumber his LLC interest by a security interest or other form of collateral only with the consent of a majority of the other Members.

26. Sale of Interest. A Member can sell his LLC interest only as follows:

(a) If a Member desires to sell his/her interest, in whole or in part, he/she shall give written notice to the LLC of his desire to sell all or part of his/her interest and must first offer the interest to the LLC.

The total purchase price shall be paid in cash at closing unless the total purchase price is in excess of $ in which event the purchase price shall be paid in ( ) equal quarterly installments.

(b) To the extent the LLC does not buy the offered interest of the selling Member, the other Members shall have the option to buy the offered interest at the Set Price on a pro rata basis.

(c) To the extent the LLC or the Members do not buy the offered interest, the selling Member can then assign the interest to a non-Member.

(d) A non-Member purchaser of a Member’s interest cannot exercise any rights of a Member unless a majority of the non-selling Members consent.

27. Set Price. The Set Price for purposes of this Arrangement shall be the price fixed by consent of a majority of the Members.

ARTICLE VIII

OBLIGATION TO SELL ON A DISSOCIATION EVENT CONCERNING A MEMBER

28. Dissociation. Except as otherwise provided, upon the occurrence of a dissociation event with respect to a Member, the LLC and the remaining Members shall have the option to purchase the dissociated Member's interest at the Set Price.

ARTICLE IX

DISSOLUTION

29. Termination of LLC. The LLC will be dissolved only upon such a decision by the Initial Member, provided no new Members have been added, or upon the written consent of seventy-five percent (75%) of all Members should additional Members be added.

30. Final Distributions. Upon the winding up of the LLC, the assets must be distributed to creditors, members in satisfaction of liabilities, and then to Members in proportion to their interests.

ARTICLE X

TAX MATTERS

31. Capital Accounts. Capital accounts shall be maintained consistent with Internal Revenue Code § 704 and the regulations thereunder.

32. Sole Proprietorship/Partnership Election. The Initial Member elects that the LLC be taxed as a sole proprietorship, and that if additional Members are admitted, the LLC be taxed as a partnership.

ARTICLE XI

RECORDS AND INFORMATION

33. Records and Inspection. The LLC shall maintain at its place of business the Articles of Organization, any amendments thereto, this Arrangement, and all other LLC records required to be kept by applicable law.

34. Obtaining Additional Information. Subject to reasonable standards, each Member may obtain from the LLC from time to time upon reasonable demand information regarding the state of the business and financial condition of the LLC, tax returns, and other information regarding the affairs of the LLC as is just and reasonable.

ARTICLE XII

MISCELLANEOUS PROVISIONS

35. Amendment. Any amendment to this Arrangement may be proposed by a Member and becomes effective when approved in writing by a majority of the Members.

36. Applicable Law. This Arrangement shall be construed in accordance with and governed by the laws of the State of Indiana.

37. Pronouns, Etc. References to a Member or Manager shall be deemed to include masculine, feminine, singular, plural, individuals, partnerships, corporations or other business entities, where applicable.

38. Counterparts. This instrument may be executed in any number of counterparts each of which shall be considered an original.

39. Specific Performance. The non-breaching Members shall be entitled to injunctive relief to prevent breaches of this Arrangement.

40. Further Action. Each Member agrees to perform all further acts and to execute, acknowledge and deliver any documents necessary to carry out the provisions of this Arrangement.

41. Method of Notices. All written notices required or permitted by this Arrangement shall be hand delivered or sent by registered or certified mail.

42. Facsimiles. Any copy, facsimile, telecommunication or other reliable reproduction of a writing, transmission or signature may be substituted or used in lieu of the original.

43. Computation of Time. In computing any period of time under this Arrangement, the day of the act, event or default from which the designated period of time begins to run shall not be included.

* * *

WHEREFORE, the Initial Member, being the single Member of this LLC, has executed this Arrangement on the day of , 20 .

Signed:

Print Name:

Address:

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Overview of the Indiana Single‑Member Operating Arrangement

An Indiana Single‑Member Operating Arrangement is a written operating agreement tailored for a single‑member limited liability company (LLC) formed under Indiana law. It documents the sole member’s ownership, capital contributions, management authority, distribution priorities, and procedures for admission, transfer, and dissolution. Although Indiana does not require an operating agreement to be filed with the Secretary of State, a signed, dated agreement establishes internal governance, preserves limited liability protection, supports bank account and EIN requirements, clarifies tax treatment (often a disregarded entity for federal tax unless an election is made), and reduces future disputes by recording the member’s expectations and reserved rights.

Why a tailored operating arrangement matters for a single owner

A clear operating arrangement documents ownership and decision authority, preserves limited liability, clarifies capital and distributions, and creates an evidentiary record for banks, tax filings, and third parties. It reduces ambiguity about management, succession, and liability exposure for the single member.

Why a tailored operating arrangement matters for a single owner

Who typically prepares and uses this arrangement

Common users range from first‑time LLC owners to established sole proprietors and their advisors who need clear governance documentation.

  • Sole proprietor forming an LLC — Creates limited liability and a record of contributions and member authority for banking and contracts.
  • Small business owner converting an existing sole proprietorship — Documents asset transfers, tax treatment, and continuity during transition and funding.
  • Accountant or attorney advising a client — Uses the arrangement to set tax election timing, capital account rules, and dispute resolution terms.

Each user profile values different provisions—tax elections, creditor protections, succession planning—so tailor the agreement to the intended business and risk profile.

Core sections to include in a professional Indiana single‑member arrangement

A complete agreement addresses identity, capital, governance, distributions, transfer restrictions, and exit mechanics so the sole member’s rights and obligations are explicit and enforceable.

Identification

Full legal name of the LLC and the sole member, formation date, and principal office address; establishes the parties and effective date.

Capital Contributions

Documents cash, property, services, or promissory notes contributed by the member and records initial capital account balances and future contribution expectations.

Management Authority

Specifies whether the LLC is member‑managed or manager‑managed and enumerates the sole member’s decision rights, signatory authority, and delegated powers.

Allocations & Distributions

Defines how profits, losses, and distributions are allocated to the member and any priority distribution or reserve mechanics.

Transfer Restrictions

Limits transfers, assigns buy‑sell conditions, right of first refusal, and procedures if the member dies, becomes incapacitated, or sells the business.

Dissolution & Winding Up

Sets events causing dissolution, winding up procedures, creditor priority, final distributions, and records retention obligations.

Step‑by‑step: completing the arrangement

Follow these sequential steps to create a legally usable document for banking, tax, and governance purposes.

  • 01
    Prepare details: Gather formation documents, EIN, and contributor information before you start.
  • 02
    Fill core fields: Enter names, addresses, dates, and contribution amounts in the template.
  • 03
    Review governance: Confirm management structure, authority, and succession provisions.
  • 04
    Sign and retain: Execute with a compliant signature method and store the original with corporate records.

Customizing and digitizing the agreement workflow

Set up a repeatable online template and signer flow to ensure consistent execution and recordkeeping.

Template Upload Upload the agreement as PDF or DOCX for field mapping.
Field Placement Add signature, date, and text fields at required locations.
Conditional Logic Hide or show provisions based on member selections.
Signer Authentication Choose email, SMS code, or stronger ID verification for signer attribution.
Save Version Save and name template versions for compliance and auditability.

Where to send or keep the signed arrangement

The operating arrangement is primarily an internal record; distribute copies to parties who require proof of governance.

  • Corporate Records: Keep the executed original in the company minute book or secure electronic records.
  • Bank or Lender: Provide a copy when opening accounts or securing financing to demonstrate signatory authority.
  • Tax Preparer: Share with your accountant for accurate entity classification and tax filings.
  • Registered Agent: Do not file with the Secretary of State; registered agent retains contact details only.

Digital signing and distribution considerations

Use an eSignature workflow that preserves intent, attribution, and a forensic audit trail when you sign electronically.

  • File Types: PDF and DOCX are widely supported for signing and archiving.
  • Authentication: Use email plus SMS or knowledge‑based checks for stronger signer attribution.
  • Integrations: Ensure compatibility with bookkeeping and document storage systems.

Key timing considerations and expectations

Timelines for an operating arrangement are mostly internal, but align execution with formation, tax, and banking steps to avoid operational delays.

Effective Date:

Agreement is effective on the specified date or upon signature, whichever the document states.

EIN Application:

Obtain an EIN promptly after formation to avoid banking and tax filing setbacks.

Banking Setup:

Provide the signed agreement when opening accounts; banks may verify signatory authority.

Amendments:

Document and sign amendments promptly; record the amendment date for enforcement clarity.

Annual Review:

Review provisions annually or when ownership or business activities change.

Milestones from formation to operational use

A simple milestone sequence helps coordinate formation, tax, and operational setup for a single‑member LLC.

01

Form LLC

File Articles of Organization with the Secretary of State and secure a registered agent.

02

Adopt Agreement

Prepare and sign the operating arrangement to document governance and capital structure.

03

Get EIN

Apply for EIN from the IRS to enable banking and payroll setup.

04

Open Bank Account

Provide the signed agreement to the bank to establish an LLC account and business credit.

Common mistakes to avoid when preparing the arrangement

  • Omitting exact legal names — Using inconsistent names can invalidate banking requests and tax filings and trigger backup withholding.
  • Vague capital terms — Failing to specify contribution amounts or valuation invites disputes and accounting errors.
  • Skipping signature formalities — Unsigned or improperly executed agreements can undermine limited liability protections.
  • Not updating after changes — Member transfers, capital injections, or management changes must be recorded to remain effective.

Risks and legal consequences of an incomplete or incorrect agreement

Piercing Liability: Failure to document separateness can increase risk of veil piercing.
Tax Misclassification: Incomplete records may complicate entity classification and tax reporting.
Banking Rejection: Banks may refuse accounts or impose delays without proper documentation.
Contract Disputes: Ambiguous authority provisions can invalidate agreements or cause litigation.
Withholding Triggers: Incorrect member TINs can trigger IRS backup withholding obligations.
Operational Disruption: Lack of succession or dissolution rules can stall wind‑up and creditor payments.

Required information and secure handling of the executed arrangement

Entity Name: Use exact filed name
Member Identity: Full legal name and TIN
Execution Date: MM/DD/YYYY format
ESIGN/UETA: Comply with ESIGN/UETA signature standards
Encryption: TLS 1.2/1.3 in transit; AES‑256 at rest
Audit Trail: Maintain signed record with timestamp and signer attribution

Who can legally sign the agreement

Sole Member

The individual or entity owning 100% of the LLC signs as the sole member; include printed name, title (if an entity), and date to establish authority and attribution for contracts and banking.

Authorized Representative

If an entity is the sole member, an authorized officer or manager may sign; ensure corporate resolution or power of attorney is attached to document authority.

Real‑world examples of how single‑member agreements are used

These scenarios illustrate typical uses and practical adjustments for different operational needs.

Small Service Business

A sole consultant forms an LLC and documents a capital contribution of personal equipment and cash

  • The agreement sets distributions to match owner withdrawals
  • The member uses the signed arrangement with the bank to open an LLC account and with the CPA for accurate Schedule C or Form 1040 reporting.

Real Estate Holding LLC

A single investor transfers a rental property into a newly formed LLC

  • The arrangement includes property management delegation and liability allocation
  • The signed agreement supports mortgage lender requirements and clarifies succession if the investor sells or dies.

Comparison: common eSignature providers for executing the arrangement

Vendor pricing and feature availability vary by plan and billing cadence; signNow appears first for parity and to show a competitively priced option.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial Yes, 7‑day free trial, no credit card Varies by vendor Varies by vendor Varies by vendor Varies by vendor
Bulk Send Yes (Business Premium tier) Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No

Frequently asked questions about Indiana single‑member arrangements

Answers to common practical questions about execution, amendment, eSigning, and recordkeeping for single‑member operating arrangements.


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