Operating Agreements
An operating agreement is a set of rules for your business. It sets out what happens to the company in certain situations. For instance, an operating agreement explains what happens upon the death of a member, or how to add a new member. Even single member LLCs need an operating agreement. Most banks will not allow you to open an account without one, and you cannot get a loan through your business unless you have this document. Operating agreements also plan for a “business divorce” when all business partners are on good terms. It is inevitable that owners or members of a company will have a disagreement, however, if you have a fundamental disagreement that you cannot get passed, then you have a plan in place for what happens when a member wants to leave. An operating agreement can also give rules for what happens when one owner or member does not agree with the rest. An operating agreement can have a tie breaker, or final decision maker. This helps alleviate stalemate in a company, due to the inability to agree on certain decisions.
Further, operating agreements give you more protection and control over your business. If you do not set up rules for how you will govern your business, the state of Georgia has rules for you. An operating agreement is an important document, and an experienced attorney should draft one for you. Operating agreements can be found online, but they may not be valid under Georgia law, or they have provisions in the document that you did not want, but didn’t know at the time. If you are interested in an operating agreement, then give us a call and we can help you through he process.