| When setting up a Self Directed IRA care must be | | | | members may agree that member should have more |
| taken in the documentation. The most important of | | | | voting power. This can be addressed in the operating |
| these documents is the Operating Agreement used in | | | | agreement to override the default state rules. |
| governing your limited liability company. | | | | There's a host of issues you must cover in your LLC |
| Limited Liability Companies are required to have an | | | | operating agreement, some of which will depend on |
| Operating Agreement - the rules by which the limited | | | | your business's particular situation and needs. Most |
| liability company is governed. Most LLC's that are | | | | operating agreements include the following: |
| formed by incorporating companies will provide a kit | | | | Members' percentage interests in the LLC |
| that includes a generic Operating Agreement. This | | | | Each members rights and responsibilities |
| generic agreement will not meet the requirements of | | | | Each members voting powers |
| your self directed IRA. You will need to customize this | | | | How profits and losses will be allocated |
| agreement to fit the needs of your LLC. | | | | How the LLC will be managed |
| A copy of the Operating Agreement will be required | | | | Rules for holding meetings and taking votes, and |
| by the Custodian and also by the bank where you will | | | | Buyout, or buy-sell, provisions, which establish a |
| have your LLC's checking account. | | | | framework for what happens when a member wants |
| An operating agreement helps your LLC by guarding | | | | to sell his or her interest, dies, or becomes disabled. |
| your limited liability status, heading off financial and | | | | These issues must be addressed in your operating |
| management misunderstandings, and making sure your | | | | agreement and can be adjusted according to your |
| business is governed by your own rules -- not default | | | | particular requirements and those of the Internal |
| rules created by your state. | | | | Revenue Service. |
| The main reason to have an operating agreement is | | | | A Self Directed IRA can be a significant wealth builder |
| as simple as it is important: It helps ensure that courts | | | | for you and your family. Take the time to investigate |
| will respect your limited personal liability. This is | | | | the possibility of using it in your financial plan - you will |
| particularly important in a one-person LLC where, | | | | be glad you did! |
| without the formality of an agreement, the LLC will | | | | You do not need to spend thousands of dollars to |
| look a lot like a sole proprietorship. Having a formal | | | | establish a self directed ira. You can do most of the |
| written operating agreement will lend credibility to your | | | | groundwork yourself. The formation can be |
| LLC's separate existence. An operating agreement is | | | | accomplished for less than a thousand dollars just by |
| also used to override default rules imposed by your | | | | doing a little legwork to find a suitable custodian, |
| state's LLC Act. For example, many LLC Acts provide | | | | forming a limited liability company in the state of your |
| that each member will have equal voting power on | | | | choice. You can do this or use any of the many online |
| company decisions. However, if one member | | | | companies that specialize in the formation of |
| contributes 75% of the capital to the company, the | | | | corporations and limited liability companies. |