Business, 3 min read
Why your LLC needs an operating agreement
Filing to form an LLC takes an afternoon. Deciding how it will actually be run is the part that protects you later.
From James Austin Law Firm
Forming a limited liability company is one of the first legal steps many Middle Tennessee businesses take. The filing itself is the easy part. The document that does the real work is the operating agreement.
What an operating agreement covers
An operating agreement is the rulebook for your LLC. It typically sets out:
- Who owns the company, and in what shares.
- Who makes decisions, and which decisions need everyone's agreement.
- How profits and losses are divided.
- What happens if an owner wants out, retires, becomes unable to work or dies.
Why it matters even for a one- or two-owner business
Without a written agreement, those questions get answered by default rules that may not match what you'd choose, often at the worst possible moment. A clear agreement also helps show that the company is a separate business from its owners.
Planning ahead
The most useful clauses are often about the future: buy-sell terms, what happens when a founder retires, and how ownership passes on. That's where business planning and estate planning meet, and why our business and estate attorneys work together.
What it costs with us
At James Austin Law Firm, LLC formation with an operating agreement is a flat fee starting at $1,250. Corporation formation with bylaws starts at $1,650. Every matter starts with a consultation, so you'll know the cost before you commit.
This article is general information, not legal advice for your situation. Read more about our business & corporate work, or request a consultation.