When you form a limited liability company, particularly with other members (equity owners), a LLC operating agreement is essential even if state law doesn’t require it. Because your bank will want to see the agreement when opening accounts, and you’ll need it for various other legal transactions (e.g., buying a company vehicle).
And whether your LLC is new or has been around for a while, you want to make sure the contents of the operating agreement are designed to serve your goals and dreams instead of working against you.
For example, many limited liability companies run without an agreement that handles important issues like death or disability of a member, what happens when a member wants to sell his equity, gets divorced, files for bankruptcy, and many other life-changing decisions.
Now you may be tempted to procrastinate with a “cross that bridge when we come to it” attitude. Yet that’s often deadly for a business venture when a crisis occurs. What do you do when a co-owner dies and the spouse wants to sell the equity to a third party? Better to nail down these issues now in a written operating agreement rather than trying to patch together something at a time when emotions are running high.
So if you need help crafting an operating agreement that’s right for you, you’ll want an experienced business lawyer to do it. The first step is a phone consultation with Attorney Mike Young. He’s the author of “How to Form a Texas LLC.”
