An operating agreement contains the rules of engagement for an LLC. It describes how the LLC will be governed, how distributions of profits happen and defines the roles and responsibilities. It is also imperative to get it right. Because it is a contract between all members (and most of the time, the managers), the operating agreement is a critical LLC document. When issues arise, the first place to look for what the LLC must do is the Operating Agreement. Many times the biggest concerns of clients involve one of the following:
- Making the rules extremely clear, so there aren’t any surprises later
- Establishing a fair and marketable governing document that won’t scare investors away
- Understanding how to go from the ‘rough sketch’ stage to a working and living agreement
The attorneys at Moschetti Law Group are experienced in company formation and drafting Operating Agreements within a syndication context. We understand how to make the agreement something that will be appealing for investors rather than scaring them away. Contact Moschetti Law Group today to discuss your company formation and how we can help you develop your strategy from the ground up.
Sam was going into a joint venture with his brother-in-law Paul to develop a duplex that they would then rent out for years to come. Sam had the experience as a contractor, and Paul had the land. While both were sophisticated business people, they had been burned before. Each wanted to make sure they knew their rights, how the money would work, and how decisions get made.
We worked with Sam and Paul to draft an operating agreement for their LLC that was extensive and established how the venture would work.
Can you have the Operating Agreement say _____________?
Probably, we can. We hear a lot of ideas about how clients want their Operating Agreement to work. Many have to do with distributions or voting rights or the ability to sell. Far and above, the most common question is, “can we put it in the agreement?” We will give you feedback about what effect we see it having and then craft something that will work.