LLC Operating Agreements
What is an LLC Operating Agreement and when and why do you need one?
A Limited Liability Company Operating Agreement is a private internal document that serves to define the role of each member comprising the LLC, compensation breakdown to each member, and how the LLC will operate both in terms of day-to-day business and behind-the-scenes corporate structure.
These documents also commonly have provisions that define what happens in the event the company needs capital contributions, what happens in the event of a dispute between the members, how many members must agree in order to change the agreement, what happens if a member defaults on the provisions of the agreement, and more.
What happens to a member's share in the event of death or default?
You should determine if a member can will their share to a third party, if the existing members have the first right to buy out the share, or if it will be reabsorbed in some other way.
What happens if a member fails to uphold their duties or falls behind on capital contributions?
Even with the best operating agreements, legal steps will need to be taken to address both of these scenarios. Having an agreement in place will allow these types of scenarios to resolve quickly.
How do I know if I need an LLC Operating Agreement?
If your LLC has more than one member, you are in need of an LLC Operating Agreement. Operating without a written agreement between the members opens up the door for both legal and financial pitfalls in the future. Without an agreement, you may have problems expanding your business or taking advantage of opportunities for expansion. Our business attorneys at CKing Justice Law have years of experience drafting Operating Agreements for a wide range of businesses and corporate structures. Contact us today to see what type of Operating Agreement and what provisions will set you up for future success.
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CKing Justice Law is located in the heart of Fort Myers, Florida and proudly provides mediation and conflict resolution services throughout the State of Florida.
