| The Operating Agreement is the fundamental | | | | necessary. |
| document that establishes how much you get from an | | | | WHO GETS WHAT? |
| LLC and how the limited liability company operates on | | | | Believe it or not, many sample operating agreements |
| an internal basis. If you use an incomplete, | | | | omit to include the details of membership ownership or |
| unprofessional or improper document, you are setting | | | | fail to provide sufficient, practical provisions to address |
| yourself and your business up for major problems. | | | | the issues and questions that could come up with a |
| Obtaining a Sample Operating Agreement is Just the | | | | real live, operating LLC business. |
| First Step | | | | Imagine starting a business and making it successful |
| The LLC agreement for your business should be a | | | | and finding out that you care unable to receive the |
| tailored document for your particular situation. There is | | | | profits or otherwise benefit from the success as you |
| no such thing as a one size fits all sample operating | | | | may have intended when you started. Believe it or not, |
| agreement that can just be purchased and signed by | | | | many entrepreneurs will start an LLC with one or two |
| all limited liability companies. The failure to understand | | | | people, forget this detail in their operating agreement |
| this can cause significant disputes and issues later. | | | | and then find out later that they are not entitled to |
| DETERMINE THE POWERS OR LIMITATIONS OF | | | | what they thought they were. |
| THE MAJORITY OWNERS | | | | The LLC agreement must clearly establish this. Make |
| In a typical business, there is one person or a group of | | | | sure your sample operating agreement has ownership |
| related persons or entities which own a majority of the | | | | provisions that were drafted by a real practicing |
| limited liability company. Then there may be minority | | | | business attorney who has experience representing |
| owners. A fundamental structuring matter involves | | | | small businesses. |
| whether that majority owner(s) will control 100 percent | | | | Without this requirement, you run the risk that the |
| of the LLC business decisions or whether there are | | | | provisions related to ownership are inadequate or will |
| matters where the approval of the minority members | | | | not work once the LLC business is in operations. Avoid |
| are required. | | | | ambiguity as this only leads to expensive disputes. |
| Because owners of a member managed LLC | | | | SUMMARY |
| business are much more active than with a | | | | Your operating agreement is a working document and |
| corporation generally, most sample operating | | | | provides the fundamental features of the business you |
| agreements are designed to provide the majority with | | | | are building. Retain the services of an attorney to |
| this power. Just know that he LLC laws allow this | | | | make sure that you have a proper document for your |
| structure to be tailored or limited if desired for your | | | | LLC business prior to adopting one. |
| business. | | | | If you do not want to retain the services of an |
| Unfortunately, many of the LLC forms available do not | | | | attorney or cannot afford one, then insist on starting |
| have sufficient provisions to completely address this | | | | off with the right, professional sample operating |
| important issue. When looking for a sample operating | | | | agreement form which addresses the essential |
| agreement, make sure these provisions are in the | | | | requirements and allows you to easily tailor it for your |
| agreement, sufficiently address the matter with enough | | | | LLC business. |
| detail and provide a way to amend or change it if | | | | |