In the dynamic world of entrepreneurship, an operating agreement serves as the constitutional backbone of a Limited Liability Company (LLC). It’s an essential document that details the ownership structure, operating procedures, and outlines how critical decisions are made within your business. But what many small business owners may overlook is the significance of keeping this foundational document up to date. …
Changes in Ownership: Addition and Removal
As your business grows, it may become necessary to add or remove owners from your company. There can be various reasons behind this decision – whether it be for financial reasons, personal reasons, or simply to bring on a new partner. However, this process can be tricky and it’s important to know the proper steps to take to ensure a …
Can You Simply Transfer Your Ownership in A Business to Someone Else?
You have ownership in a business, but you don’t want to be involved in the business anymore. Or, maybe you want to assign the distributions you receive from an LLC to payoff a debt. Can’t you simply just transfer your ownership to someone else without having to go through a lengthy, legal process? Time to check your Operating Agreement As …
What To Do When “Equal Participation” Equals Deadlock
Absent language to the contrary in an Operating Agreement, “equal participation” means all partners have equal rights and authority to participate in the management of the business. This means each partner has one equal vote when it comes to decision making. Obviously, this can get tricky when you have an equal number of partners. So, what do you do when …
