Why do I Need an Operating Agreement for my LLC?

While many states do not legally require your Limited Liability Company (hereinafter “LLC”) to have an operating agreement, it is not a wise idea to operate an LLC without one, even if you are the sole owner of your company. An operating agreement will help you protect your limited liability status, specify financial and management roles to avoid common misunderstandings, and in order to make sure your business is governed by your own rules, not just the default rules created by your state.

For instance, if an owner/manager contributes more assets than the others, you may want to give that person a greater share of the profits. Or you may want one or more of the owners to receive a salary for their participation and services. Most importantly, you will need to have tailored provisions on how to value an owner’s interest in the business if the owner dies or leaves the company. It will also get you to focus on issues you might not have thought through with your other business partners.

OA

A well-drafted Operating Agreement will provide the following, but not limited to:

  • Provide a framework for the settlement of disputes between members/managers;
  • Prevent a member from selling his/her interest to a third party without first offering it to existing members (rights of first refusal);
  • Provide a framework for the purchase of membership interests by the remaining members in the event a member dies or becomes legally incompetent;
  • Prevent a member from competing against the company both now when he is a member and for a number of years after leaving the company;
  • Require members to maintain the confidentiality of all customer names and other company records;
  • Prevent a member from impairing the goodwill of the company;
  • Prevent a member from soliciting customers away from the company. Provide for the indemnification of the members and officers of the company;

At Gulati Law we ensure that our clients are furnished with a tailored operating agreement drafted to suit the needs of your business and the laws of our state. Contact us today, for yours!

 

ATTENTION: NEW FLORIDA SMALL BUSINESSES- BEWARE OF SCAMS!


scam1

A Florida company based out of Tallahassee, Florida, has been attempting to convince new business owners who have recently formed a new corporation or LLC, to send money by exaggerating to be involved in a vital step in the business formation process. This “company” has gone by other aliases such as the “Florida Center of Corporation,” and now currently operates under “United Business Services”

scam3

In the letter it states: “You have one step left to receive your Florida Certificate of Status”, they are instructed to complete their filing by filling out a stub and to “mail back to the corporations center with your payment of $47.00 (some recent mailings have said $47.99 or a similar amount) to complete your articles of organization certificate.” We urge caution because the correspondence is made deceptively like it is coming from a government agency. And note in the image here, that in very fine print, it states that “This is not a government agency.”

 

scam2

We classify this as an inappropriate deception of the Florida Department of State services because the only service United Business Services is providing is to obtain a Certificate of Status (or good standing) from the Secretary of State of Florida.  The state only charges either $8.75 (for an INC) or $5 (for an LLC) for this.  Furthermore, when we checked the address for the company, it came up as an empty office space which is available for rent. The company came up in no searches affiliated with that address, or any other.

 

If you have any questions as to the legitimacy of these letters, do not hesitate to contact your Florida Business Law Attorney as soon as possible.

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