Why Your LLC Needs an Operating Agreement
Forming an LLC can be a great option if you are starting a business or want to make certain types of investments. If you are going to start an LLC, it is important that it is structured and documented properly.
You will need legal help to structure an operating agreement, which is a very important legal document that can help protect you and your LLC. When you are looking for legal guidance in the Provo, Utah, Howard Lewis & Petersen can offer the support that you need.
What Is an Operating Agreement?
An operating agreement is a very important document that will help to spell out all of the terms of the underlying business. When it comes to an operating agreement LLC owners will find that they identify ownership, responsibilities, and other key terms between members. This can help settle disputes later on and will act as a guide for the direction of ownership and the business in the future.
Importance of an Operating Agreement
If there are more than two individuals that have ownership in the LLC, having an operating agreement should be considered a top priority and necessity. Even if you are the sole owner of the LLC, having an operating agreement can be helpful. The agreement will often be required for a number of legal transactions, such as taking out a loan, leasing a place of business, or determining how to run a business.
There are many benefits that come when you have an operating agreement in place for your business. An LLC will benefit from having an operating agreement in practically any situation.
One of the main benefits is that it will spell out all of the key terms and agreements between members. This will include identifying ownership of members, spelling out voting rights, determining how cash infusions and distributions are made, and power of duties.
This can help prevent disputes and will ensure all parties are on the same page.
Ultimately, having this document in place will help to formalize an agreement among members and can help keep the business properly organized moving forward.
How To Create an Operating Agreement with an LLC Attorney
Having an operating agreement should always be a priority if you are an owner of an LLC. Today, there are base documents available that you can find, but it is often wise to have an attorney draft one for your business. As there is no one-size-fits-all approach to running a business, having this document will help customize the direction of your business.
The most important thing that an attorney can do is to take the verbally agreed terms of how your business will be managed and then draft them into a binding operating agreement. As states have different rules around these agreements, you will want to hire a lawyer that is experienced with drafting a Utah law operating agreement to ensure it remains binding.
The attorney can also provide support during negotiations with the other parties and will offer any guidance you need if questions arise in the future.
An operating agreement is clearly a very important document that can be used to help structure and manage your business. When you are looking to create an operating agreement, an LLC attorney can help with the structure.
As you are looking for LLC lawyers — contact Howard Lewis & Petersen. We offer a lot of support that can be used to help draft, negotiate, and effectuate this important legal arrangement.
