What are the key provisions and necessary clauses of a solid LLC Operating
The rights of business partners or “members” as they are called
in a limited liability company are not always easy to memorialize. The
truth is, most business partners would say, at the beginning of going
into business together, a handshake would be more than sufficient. In
a perfect world, this would be true, but we don’t live in a perfect
world and even the best of business partners need to protect themselves,
their rights and their interest.
Here are two of the five most important provisions/ topics that must be
covered in a basic LLC Operating Agreement:
Management/Voting – Who will manage the operations of the company? Some LLC’s
are managed by the members (shareholders) of the LLC, while other companies
are managed by a designated manager(s), who may or may not be an actual
member of the LLC.
Initial Capitalization – Who will be putting up the initial start-up capital and what percentage
of membership interest will that represent? It is important to understand
and memorialize the amount of start-up capital that is put into starting
an LLC and the percentage interest that will represent.
If you or someone you know has questions or needs starting or operating
a small business, we can be reached at (203) 651-5521.