The law requires that each LLC has an Operating Agreement to define how the Limited Liability Company is run. LLC is the most popular entity that small business owners use to protect their assets and operate their business with. But forming the LLC is only the first step to ensure that you are protecting your personal assets while conducting business.
Most of the disputes should be addressed in the Operating Agreement. If there is not an Operating Agreement then disputes involving the law applies to the disputes your company is involved in.
There is so much information that is contained in the Operating Agreement that effects the way disputes will be handled. I have attached the law regarding members because that is the most common disputes that lawyers are involved with that are covered with 10-5A.
I am shocked how many Limited Liability Company’s that either have no Operating Agreement or one that doesn’t.
That is the first question when a new client comes in that has an L.L.C. is too request to see their Operating Agreement. It is the road map on how the LLC should be operated.
The attached checklist covers most of the issues that need to be addressed in your operating agreements