Operating Agreements in LLCs
Regardless of the type of business structure you’re considering, if your company or commercial venture is going to have more than one owner, there are going to be concerns about joint decisions and the transfer of ownership. You may even have questions about taxes. Even if there is a clear division of power when it comes to the day-to-day operations, there has to be a mechanism in place to deal with selection of the management of the company, the sale of a member’s portion of the company, decisions about new investors, succession rights in the event of the untimely absence or death of one of the partners, et cetera. If you’re considering forming a Limited Liability Company (LLC) or changing over to an LLC, a solid, well-prepared operating agreement can address these concerns.
Operating Agreements For Limited Liability Companies
A Limited Liability Company is a business structure that functions as a partnership in many ways, but also allows the members to enjoy the same type of immunity that corporate shareholders possess. The operating agreement of an LLC establishes the “rules between the members” for such things as:
- The requirements for a transfer of membership interest (This gives the LLC control over who can become a member.)
- The management selection of the company
- A contingency plan for the death of a member, the diminished mental capacity of a member, personal bankruptcy, et cetera
- The method of valuation for the members’ interest
- Non-compete clauses that apply to members and former members
- Rules for resolving deadlocks on votes
- Rules for the determination to sell the company
Virginia Attorneys With Business Formation Knowhow
At the northern VA law firm of Business Division of Hale Ball, the Business Division lawyers have experience with business formation and operations. We know the concerns that investors and business people have when they are establishing, operating and expanding an enterprise with others. Even the most trustworthy of partners can experience a lapse in health or suffer a financial misfortune. When one of Business Division attorneys prepares an operating agreement for your LLC, you and your partners will know the cause and effects of trigger events (i.e. death, disability, personal financial insolvency, et cetera). We will also explain to your members the extent of their personal liability.
Avoid Future Legal Complications
The business law attorneys at Hale Ball know that the best way to avoid future legal entanglements is to start their clients’ LLCs with an ironclad business operating agreement. When members of a limited liability corporation know what’s required of them, costly misunderstandings and mistakes can be avoided.
For decades, the Attorneys of the Business Division of Hale Ball has been serving new and existing businesses in Northern Virginia with their business formation and transformation needs.
If you have a question about any type of business matter, we encourage you to schedule a confidential consultation with one of our Northern Virginia lawyers. To make an appointment call us at the above telephone number 1-703-591-4900 or use the contact form below.
Since 1980 the AV-rated law firm of Hale Ball has served the legal needs of individuals and businesses. Our team of attorneys include lawyers named to Super Lawyer and Rising Star lists, as well as attorneys with advanced legal degrees, specialty certifications and lawyers who teach their areas of practice to other lawyers.
Use the contact form on this page to schedule a consultation, or call 703-591-4900.
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