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The details of an LLC operating agreement

On Behalf of | Oct 5, 2023 | Business Transactions

You may have the dream of starting a new business and working for yourself. Being an entrepreneur is the dream of many, but it is not always easy to succeed in this endeavor. There is much more involved with starting a company than only having a good idea and launching a social media page. You must make significant legal and financial decisions that will determine how your Oklahoma company will operate, how you will pay taxes and more.

Many new businesses are LLCs, which are limited liability corporations. This is a relatively simple type of business structure to establish, which is one reason why it is so popular. It allows owners to enjoy limited personal liability from shareholders, as well as flexibility in other areas. In order to have a successful LLC, you must have a thoughtfully drafted operating agreement. It is important to know what terms should be in your agreement and how to protect your interests.

Terms of operation and more

The terms of your operating agreement are critical. They can affect how your company functions now and into the future, and it is critical to consider these matters before you proceed. While every LLC is unique, in most cases, the following details are important in an operating agreement:

  • The details of how your business will function, including its official name, where the business is located and more.
  • Management structure, which outlines how members are involved and their role in the company function.
  • Operating procedures, which could include how to add new members, voting procedures, facilitating member exits and even procedures for closing operations.

An LLC operating agreement should contain as many details as possible as this could reduce complications and make it less likely that issues will arise. Additional terms in an LLC operating agreement may also include member information, tax preferences, a detailed liability statement and more.

The future of your company

When creating an LLC operating agreement, it is critical to consider how the terms you are including may impact the future of your company. It is in your interests to seek professional guidance as you are creating documents and strategies that will outline how your company will function for years to come. As you are thinking about your options, you may find it helpful to focus on what will provide your business with the strongest chance for success both now and later.