Many business owners often times feel that the
filing of the Articles of Organization is the final step to formalizing their
business entity. There is the additional
step that is suggested to formalize the rules that will govern the
relationships between individuals within the entity and also how to manage the
affairs of the business. This can be
accomplished through the organization’s Operating Agreement.
Operating Agreements are used by Limited Liability
Companies (LLC) that serve as an agreement between the members of the LLC and
when combined with the Articles of Organization provide for the governing of
the entity. The Operating Agreement
should be drafted to contain such provisions that include, but not limited to:
- Relations among members and other members and their defined rights within the LLC;
- Rights and duties of a person acting in the capacity of a manager;
- Activities of the company and the conduct of those activities; and
- Means and conditions for amending the Operating Agreement.
It should be noted that any person who becomes a
member of any LLC is deemed to assent to the Operating Agreement. The Operating Agreement does not have to be
filed with the Secretary of State in conjunction with your Articles of
Organization. However, when there are multiple
individuals involved within the business venture, it is wise to have a general
understanding of the governing provisions of the entity when filing the
Articles of Organization.
If you would
like to have your Operating Agreement drafted, amended or reviewed do not
hesitate to give the legal team a call at The Maitland Law Firm.
For more information call Brad Hicks at
919-265-0800.
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