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Operating Agreements 101:

Operating Agreements 101 What are they, what do they contain, and why are they important? Jeana R. Morrissey, PLLC (480) 556-1902

An Operating Agreement is::

An Operating Agreement is: A contract between the members of an LLC Proof to third parties of the existence of the LLC as a separate legal entity

Key Terms:

Key Terms Who are the members? What percentage of ownership in the company does each member have? What is each member’s capital contribution to the company?

Key Terms (Continued):

Key Terms (Continued) Voting Rights of the members Manager-managed vs. Member-managed Who runs the day to day business operations? What are the roles and responsibilities of the members and/or managers?

Key Terms (Continued):

Key Terms (Continued) Transfer or forfeiture of Membership Interests LLC interests are not like publicly traded stocks and cannot be freely sold on the open market. Under what circumstances an LLC interest can be sold, how the purchase price will be determined, and the process to be followed for such a sale. How a member can forfeit his or her membership interest.

Key Terms (Continued):

Key Terms (Continued) Process for bringing in new members Process for resolving disputes Lots more…

Parting Thoughts:

Parting Thoughts You should get any type of agreement in writing before a dispute arises.

A well drafted operating agreement: :

A well drafted operating agreement: will lay the foundation for the operation of your business, especially when partners are going into business together, and it will address, in advance and in writing, a number of potential issues and how they are to be resolved.

Morrissey Law Jeana R. Morrissey:

Morrissey Law Jeana R. Morrissey Email: [email protected] Phone: 480.556.1902

www.morrisseylawaz.com :

www.morrisseylawaz.com Also check out our information on LLC Member Buy-Sell Agreements ~They go hand-in-hand with operating agreements between members and should be drafted early on in the business partner relationship.

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