WE DRAFT LLC OPERATING AGREEMENTS
We can draft, negotiate, and review any LLC operating agreement on your behalf.
YOU ABSOLUTELY NEED A LAWYER DRAFTED OPERATING AGREEMENT
You can form a New York LLC online in under 60 seconds. But you cannot go without a lawyer drafted LLC operating agreement if more than one member owns the LLC. LLC operating agreements are quite complex, and it requires special expertise to draft one that leaves you and your fellow LLC members protected. TEMPLATES FOUND ON THE INTERNET OR PROVIDED BY LLC FORMATION SERVICE COMPANIES ARE NOT SUFFICIENT.
In a perfect world, each member should have their own lawyer to review the operating agreement, and nobody should contribute money or anything else to an LLC before the operating agreement is properly executed.
WHAT HAPPENS IF YOU DON’T HAVE AN OPERATING AGREEMENT?
If there is no operating agreement or if the operating agreement does not cover a topic, the New York Limited Liability Company Law applies. In most cases, this is not good for the LLC members. The New York LLC and the New York limited liability company law came into existence in 1994. It was designed as an entity that should be shaped by contract and thus by the members in the operating agreement. The law is only designed as a fallback and does not fully protect the members. Unfortunately, many new business owners do not heed this advice and still go without a proper operating agreement. Don’t be that business owner.
WHAT ARE THE TOPICS IN AN OPERATING AGREEMENT?
Some critical topics that should be covered in an LLC operating agreement because they are poorly addressed in the default laws are:
Management provisions, including unanimous member approval for specific major decisions;
The members’ responsibilities, such as the contribution of money or services;
A solution for a deadlock situation where the required vote for a decision is a tie;
A solution for when a member dies becomes disabled, or wants an out, aka buy-sell provisions;
Provisions relating to the admission of new members;
Distribution of the LLC profits and losses;
Provisions relating to expulsion of LLC members.
Call Us for Help with LLC Operating Agreements 212 253-1027
Also, see “How to Execute a Contract – Good Practice Checklist.”
- How to deal with LLC Member Disagreements
- Five Steps of Buying a Small Business in New York
- What happens when an LLC Member dies?
- How to determine LLC Ownership Percentage
- How to choose New York Law and New York Courts in your Business Contracts
RATSCHKO WALLACE PLLC
New York, NY 10004
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