Opening a business in Oklahoma leaves you open to a great many options. One of them will be to structure your new company as a Limited Liability Corporation (LLC). This is an arrangement that has a great many features to recommend it. If you are looking for more protection with less formality, it may be best for you.
You’ll need to form an operating agreement
No matter what type of company you decide to form, there will be a certain amount of paperwork involved. Forms will need to be filled out and filed with the proper authorities. With that being said, if you are new to the world of business law, you’ll find opening an LLC a relatively easy task.
An operating agreement is a contract document that can run anywhere from 5 to 20 pages in length. The purpose of this document will be to lay out the basic rules that all of the members of the company agree to. These can include the following:
- The percentage of ownership each member is entitled to
- Voting rights and responsibilities
- The various duties and special powers of members and managers
- The precise distribution of profits as well as losses
- When and where meetings are held
- The precise rules concerning buy-outs as well as buy-sells
Why do you need an operating agreement?
There are many reasons why you will find it beneficial to record and file an official operating agreement. This type of contract can help you resolve or prevent such unfortunate future circumstances as a breach of contract lawsuit. An operating agreement can also ease the transition when a member leaves or dies.
It is true that many states will not require you to draft and file an operating agreement. However, most experts in the world of business consider it unwise to try to run your business without one. This is because this type of agreement is designed to establish the rules that you and your partners adhere to.