For any business entity or individual engaging in business practices, it is crucial to be organized and as protected as possible from any potential issues. Once an entity takes the initial steps to become a Limited Liability Corporation (“LLC”), the next step requires the drafting and implementation of an operating agreement. Entities and individuals alike are attracted to LLC’s due to the various benefits such as, tax classifications, limited liability, etc. The purpose of a LLC is to unite and organize members to establish a more efficient business. In an operating agreement outlines the financial decisions and management of the parties involved in an LLC. Because an LLC is seen almost as a hybrid between a partnership and a corporation, it is necessary to have a structure similar to that of corporate bylaws, which establishes the rights and duties, certain members are either entitled to or responsible for. Federal and State law refrain from establishing strict requirements on LLC operating agreements intentionally allocating flexibility to members who seeking is to establish the agreement. It’s essential that this flexibility be taken advantage of by the founding members. If an LLC does not take advantage of establishing an operating agreement, each state has default rules to govern a LLC. It is vital that a LLC is prepared at the outset and develop their own, individualized governing structure, tailored to their specific needs. The Firm specializes in creating operating agreements for individuals or entities, focusing on their purpose while drafting. The Firm designs the operating agreement to protect client’s control, protect them against personal liability for LLC decisions, and to achieve the overall goals our clients set forth at the outset.
Once drafted, an operating agreement is a contractual agreement binding to either a single member, or all members seeking to become part of the LLC. The firm works with and for clients to establish their ideal structure, developing a proportionate ownership percentage for each member, the voting rights of each member, the process and rules outlining member meetings, and the responsibilities of all officers and members. Certain features must be created at the outset of preparation for possible withdrawal, dissolution, and even a buyout of the LLC. At Brinen & Associates, we believe that a party to an operating agreement must have all their bases covered. The Firm conducts the proper preparation and due diligence to ensure that clients are protected and can establish an LLC that is coextensive to their vision.
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