Are you thinking of starting a business with a few other people? If so, you might want to consider forming a Limited Liability Company, or LLC. An LLC is a type of business entity that provides its owners with the benefits of both a corporation and a partnership. It can also protect the owners’ personal assets in case the business runs into legal trouble or incurs debt.
One of the most important documents you will need to create when forming an LLC is an operating agreement. This document outlines the rules and regulations that the members of the LLC must follow when conducting business. It also details how profits and losses will be distributed among the members and how the LLC will be managed.
If you’ve decided to form a member-managed LLC, meaning that all members will have a say in the day-to-day operations of the company, you may want to consider using a template LLC operating agreement to help you get started. A template can provide you with a basic outline of what should be included in the document, saving you time and money on legal fees.
Here are some of the key sections that should be included in a member-managed LLC operating agreement:
1. Formation: This section should outline the name of the LLC, the purpose of the business, and the date it was formed. It should also indicate whether the LLC is being formed for a specific period of time or indefinitely.
2. Members: This section should list the names and addresses of all members of the LLC. It should also detail how new members can be added or removed from the LLC.
3. Capital Contributions: This section should outline how much each member is contributing to the LLC, both in terms of cash and other assets such as equipment or property.
4. Profits and Losses: This section should detail how profits and losses will be divided among the members of the LLC. It should also outline how any taxes owed by the LLC will be paid.
5. Management: This section should outline how the LLC will be managed on a day-to-day basis. It should detail the decision-making process, how meetings will be conducted, and what role each member will play in the management of the LLC.
6. Dissolution: This section should outline how the LLC will be dissolved if it becomes necessary. It should detail the process for winding up the business and distributing assets to the members.
Using a template LLC operating agreement can help you create a document that is tailored to your specific needs. However, it’s important to remember that every LLC is unique, and you may need to make changes to the template to ensure it accurately reflects your business. If you’re not sure where to start, consider working with an attorney who can help you create an operating agreement that is right for your business.