Questions to Consider When Writing an LLC Operating Agreement

Here are some questions to consider before starting your LLC and forming your Operating Agreement.

Start Up: How much money is each member contributing to starting the business? Will someone contribute more? What if you need more money? Will you open the doors to outside investment? Will the members contribute more money? What is each partner’s interest (economic and managerial) in the company? How many classes of member will there be?

Voting: How will you make decisions? Will you need a unanimous vote? What happens when there is no majority? If there are different member classes, which get a vote? Do some members’ votes count for more than others?

Economic Interests: When will the partners be able to take money out of the business? Will partners ever get re-paid for the investments they put in, if so, when? If there are different member classes, do some classes have more rights to profits than others?

Transfer of Shares: Who would inherit your shares in case of death or disability? Do you want your beneficiaries to have a say in what happens to the company? Are you prepared to share power with your partner’s beneficiaries? What if one partner wants to sell their shares? Do you want a right of first refusal to the shares? Do you want to set a buy-out price ahead of time?

Dissolution: Do you have an “exit strategy”? What if you no longer want to continue the business? Do you have a plan to dissolve the LLC?

For a free, confidential conversation to discuss this and other business law matters, including business formation legal services, contact Maryland business attorney Stephen J. Reichert at 410-299-4959, sreichert@reichertlegal.com or by clicking here.

Day, evening and weekend appointments are available in office or at your residence. Mr. Reichert personally serves business law clients throughout the entire state of Maryland.

Stephen looks forward to assisting you with your Maryland business law needs.

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