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Corporations and LLC's are required to draft agreements that outline the management of the business. Corporations call these documents By-laws, LLC's call these documents an Operating Agreement.
These forms are not required to be filed with the state but they are required to be kept with your corporate records. There are several reasons that will require you to provide these documents:
- To open a company bank account
- To apply for a loan
- To attract investors or business partners
- To purchase or sell company owned real estate
- To sign lease agreements for the company
- If you are audited or involved in a lawsuit
These are just a few of the reasons that could require you to produce company by-laws or an operating agreement.
An Operating Agreement, similar corporate by-laws in a corporation, is a document that governs the operations or your Limited Liability Company. As with by-laws in a corporation, the Operating Agreement varies widely from LLC to LLC but typically the Operating Agreement outlines:
- The management structure of the L.L.C.
- How the L.L.C. will be treated for tax purposes
- Percentage of Profit/loss distribution share among Memebers
- Establish each owners percentage of ownership in the L.L.C.
- The rights, duties and obligations of each owner
- What happens when a member wants to sell their interest
Click here to have an IncAssist Business Consultant help you prepare your Operating Agreement.
Thank you,
IncAssist, LLC
Experience you can trust, prices you can afford!
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