Starting a limited liability corporation is an exciting venture, but it’s important to have a solid operating agreement before kicking things off. At its core, the operating agreement is internal law, and the legal team at The Law Office of W. Randall Holcomb, PLLC, in Greensboro, NC, advises seeking legal guidance when writing it. There are many issues to consider, and a business lawyer can help you get organized.

What Should Be Addressed in an LLC Operating Agreement?

1. Ownership & Staff Hierarchy

The most important decision is who is in control of what and how much control they have. If you have investors, lay out how much ownership they have and to what extent they can weigh in on operations. You’ll want to work top down, laying out a full plan on who is responsible for what so you have a system that clearly outlines the hierarchy.

2. Financial Plan

Profits and losses are part of the game, and as an LLC, you need to outline how they’ll be distributed to the owners. This traditionally is based on the percent of ownership, though your circumstances may be different. Organize the cash and debt flow accordingly based on the LLC’s interests.

3. Ownership Transition

Things inevitably change, which is why it’s important to outline a system for a new owner to take over. In many instances, LLCs are legally required to dissolve if founding members depart, but there are steps to take to keep operations alive. Build a foolproof plan with an exit strategy, as well as how the previous owner's shares of the business will be distributed. Consult with a business lawyer for this step, as an effective plan is essential.

4. Registered Agent

Running an LLC comes with piles of important paperwork, and you can’t afford to miss time-sensitive bills or tax information. To safeguard yourself, define a registered agent to accept content on your behalf and act as a conduit between you and the state. This will ensure you’re on top of your books and in good keeping with the government.

5. Management Roles

Along with a hierarchy, you’ll also need to determine management duties. From top down, lay out what management at different levels is responsible for on both a hands-on and managerial level. This will keep your business model functioning well and avoid any costly conflicts once things are in motion.

If you’re organizing your LLC’s operating agreement, turn to a business lawyer at The Law Office of W. Randall Holcomb, PLLC. They will help you take the proper steps to protect your business and offer valuable financial services for any issues you’re facing. Call (336) 888-8760 to schedule a consultation, and visit their website to learn about their services.