Experienced Attorneys Crafting Business Operating Agreements
When you start your business, careful planning for the future can make the difference between financial struggles and growth in your market. Another important consideration is to determine how key decisions will be made during the life of a limited liability company (LLC) by creating an operating agreement.
Cross Law Firm, S.C., has experience supporting the needs of small businesses. From our offices in Milwaukee and Waukesha, we support entrepreneurs and startups throughout Wisconsin as they create operating agreements that outline clear plans for their business. We are proud to help these companies choose the right structure and outline procedures that support their successful operations for years to come.
What is an operating agreement?
An operating agreement is a document that forms the foundation of operations for an LLC. While Wisconsin law does not require LLCs to have these documents in place, creating an operating agreement allows your business to clearly outline the procedures and structure under which you will do business.
Some of the many details covered by an operating agreement include:
- Information about the company – What name will your company operate under? What type of business will the company engage in? Will your company be ongoing, or will it operate for a limited time frame?
- Information about members – Who are the members of your company? How do they contribute to the business? What percent of the company do they own? Are you manager or member managed?
- Financial information – How will your company be taxed? What kind of compensation or distributions will members receive and how is that determined?
- Meetings of members – How will the members of your LLC make decisions? Will you meet annually, or will you conduct meetings as situations arise? How will you record the decisions you make in these meetings, and how will you communicate those decisions to any members not in attendance? How many members need to agree on decisions and do some decisions require all to full agreement.
- Dispute resolution – If members of the company have a dispute, what process should they use to resolve this disagreement? Are they required to utilize arbitration, or are there situations in which they can move forward with a lawsuit?
- Procedures for the exit or addition of a member – How does a member leave the company? How is the value of exiting member’s share determined and what are the terms of payment? Are there requirements for sale or transfer of their interest in the company? What should other members do if they want to remove one member? What happens if one member passes away? How can you add a member to your organization?
- Procedures for dissolution – If the time comes for this business to come to an end, what procedure should members follow to dissolve the company?
By clearly outlining these and other details, you can create a clear set of rules for your company. This can help you avoid conflict that arises from misunderstandings or disagreements, and it can provide you with a clear guide to operating your business as it grows.
Reach Out To Our Firm To Discuss Your Business
To take the first steps toward drafting an operating agreement that protects your business and lays the groundwork for its future success, call Cross Law Firm, S.C., at 414-616-3229 or reach out to our team online.