LLC Operating Agreements
An LLC operating agreement covers all of the managerial and financial rights and duties of the members of a limited liability company (often called an “LLC”). Though many states don’t require an operating agreement in order to properly form an LLC, taking the time to draft one can help your business run smoothly and protect you and your business from costly financial and management disputes. VinceLegal is committed to helping you craft all documents defining the corporate governance for your company.
Operating agreements contain similar provisions to other kinds of partnership agreements (like bylaws for a corporation) but also contain other details pertaining to the organization of the LLC. Georgia does not require an operating agreement in order to form an LLC, but executing one is highly advisable. There is no set criteria for the content of an operating agreement, but it typically includes topics such as how meetings are conducted, how the company will be managed, what capital contributions are required from each member, and how profits and losses will be allocated. The operating agreement does not need to be filed with the state.
Key topics generally covered in an LLC’s operating agreement include:
- Identity of members
- Capital contribution of members, including situations in which additional capital contributions are required
- Identity of managers
- Classes and relative powers, rights and duties of members and managers
- Procedural requirements for decision-making, including process for amending the operating agreement
- Protective provisions
- Access to information and records
- Dissolution events
- Procedure for winding up
If you have already formed your LLC or are considering doing so, VinceLegal can help by drafting an operating agreement that clearly delineates the rights and powers of members and managers and supplies clear rules for how your LLC will operate and who will make critical business decisions.
Bylaws outline the rights and responsibilities of owners and officers of a corporation, supplying critical rules that govern both the day-to-day operations of the corporation as well as procedures for special situations. Most states (all but 15) require corporations to maintain bylaws, so if you are considering forming a S- or C-corporation, you will most likely need to draft bylaws. VinceLegal is committed to helping you thoroughly craft bylaws tailored to your company.
Bylaws contain similar provisions to other kinds of partnership agreements (like an operating agreement for an LLC) but also contain organizational details and proscriptions specific to the corporate form. Importantly, many states provide default rules for corporations, while simultaneously permitting corporations to override those state-supplied default rules by explicitly providing otherwise in the corporation’s bylaws. For example, in Delaware, a corporation may choose in its bylaws to specify the number of voting shareholders required to be represented at a shareholders meeting in order to constitute a quorum. If a company’s bylaws do not specify a number, Delaware sets the quorum at one-third of voting shareholders of the corporation.
Key topics generally covered in corporate bylaws include:
- Identifying information (e.g., name, purpose and location)
- Number and type of shares and stock classes
- Number and responsibilities of the Board of Directors
- Committees of the Board of Directors
- Process for appointing, removing and replacing directors
- Titles of corporate officers
- Process for appointing, removing and replacing officers
- Procedural requirements for voting, including process for amending bylaws
- Conflict of interest provisions
- Indemnification of directors and officers
If you have already incorporated your business or are about to, we can assist you by drafting corporate bylaws that provide clear rules for how your business will operate, delineate procedures for making critical corporate decisions, interact appropriately with background state corporation law and dictate how any disputes among owners–and between owners and officers–will be resolved.
If you and another person go into business together, in all likelihood you have created a legal partnership in which you owe certain duties and obligations to each other.
The worst thing partners can do is establish a business or enter into some form of joint venture without a clear agreement what their rights and responsibilities are to each other. For these reasons it is crucial that you and your partner or partners reduce into writing the exact details that center around the business. This way, if there is a dispute, which occurs more often than not, a resolution will be laid out in the partnership agreement without having to resort to litigation.
It is extremely beneficial to consult with an attorney before drafting up a partnership agreement. VinceLegal has broad experience in partnerships duties and obligations, and can help you navigate the minute details of your business that you may encounter. We understand that every business is different, and with partnerships, things can get very complex.
Before starting your business, contact us to ensure that you and your business are protected from all unforeseen pitfalls that may lay ahead.