Not sure where to start? We will help you select the appropriate business structure, draft necessary agreements between owners, and plan for the future. We believe that practical planning is the best solution for your business’s long-term success.
From negotiations to drafting to final review, each stage of contract development is crucial in memorializing the goals and limiting the liability exposure of our clients. We understand the nuances of language and apply them to your advantage. Whether it is business contracts, employment contracts, or individual agreements, our attorneys have the professional knowledge and experience to help you finalize your transactions while steering clear of any potential problems.
We develop long-term relationships with our clients, advising them on important legal decisions including:
- Business Entity Formation (i.e. Partnerships, LLCs, S-Corp, C-Corp, etc.)
- Business Contracts
- Sales and Purchase Agreements
- Employment Contracts
- Business Succession Planning
Is a Limited Liability Company (LLC) right for you?
Starting a business is a huge financial risk. It is essential, not only, that you choose the right type of corporate entity for your endeavor, but that you also fulfill all of the required formalities to ensure that your business is legally separate from your personal affairs. Failure to establish and maintain the corporate formalities may mean that you will lose the personal asset protection that a corporate structure normally provides if your business is sued.
An LLC is the most common type of business entity chosen by small business owners because of its ease and flexibility to administer. Unfortunately, many people who choose to set up an LLC without the assistance of an attorney believe that all they need to do is file their Articles of Incorporation with the Secretary of State and they are done. However, the strength of the LLC lies in the Operating Agreement which must be created separately.
An Operating Agreement is a blueprint for the operations of your LLC. Its form and contents will vary significantly depending on how many members are in the LLC, however, all operating agreements should have these essential elements:
- Organization – This Article covers the date of establishment of the LLC, who the members are, and the structure of the ownership.
- Management and Voting – The LLC may be managed by the members or by a manager who is appointed by the members. The specific authority of the members over company affairs is outlined herein.
- Capital Contributions – This Article covers which members have given money to start the LLC. It also discusses how additional money will be raised by the members if additional capital funds are needed.
- Membership Changes – This Article establishes the process for adding or removing members, when members can transfer their ownership interests, when happens when a member dies or what a member declares bankruptcy.
- Dissolution – This Article will cover the circumstances in which the LLC may be or must be dissolved (aka “winding up”).
An Operating Agreement may seem unnecessary for a single member LLC since there is only one party involved in the operations of the LLC. However, the Operating Agreement is a key factor that Judges look in determining whether to uphold the limited liability status of the LLC (i.e. what protects your personal assets if your business is sued). If you have multiple members in the LLC, it is not only essential to uphold the corporate formalities but, to prevent misunderstandings by setting clear expectations about the roles and responsibilities of the members.
All of the requirements and pitfalls of starting an LLC, or any business, may not be immediately obvious by an internet search. Most people won’t learn that there is an issue with the way they formed and maintained their business until it is too late (i.e. after a claim or lawsuit is filed). It is always less expensive to do things right the first time, then to pay to have them addressed during a crisis.