Are you in the process of starting a Limited Liability Company (LLC)? If so, you’ve probably heard of the importance of creating an LLC operating agreement. This legal document outlines the ownership structure and operating procedures of your business.
Fortunately, creating an LLC operating agreement doesn’t have to be difficult or costly. With the help of online legal services, such as Rocket Lawyer, you can easily draft and customize your own agreement.
So, why exactly do you need an LLC operating agreement? Here are some reasons:
1. Clarify Ownership and Management Structure
An LLC operating agreement clearly outlines the ownership and management structure of your business. It will state who the owners (also known as members) are, their voting rights, and how profits and losses will be distributed among them. This document will also specify who is responsible for managing the business and what their roles and responsibilities are.
2. Protect Your Limited Liability Status
One of the main benefits of forming an LLC is that it provides limited liability protection for its owners. This means that if the business is sued or owes debts, the owners’ personal assets will typically be protected. However, if certain formalities are not followed, this protection can be lost. Having an LLC operating agreement is one of these formalities and can help ensure that your limited liability status is maintained.
3. Avoid Legal Disputes
Without an LLC operating agreement, conflicts can arise between members over the interpretation of the company’s ownership, management, and financial rights and obligations. An LLC operating agreement can help prevent and resolve these disputes by clearly stating all terms and conditions that members have agreed upon.
Creating an LLC operating agreement with Rocket Lawyer is an easy process. Simply answer a few questions about your business, customize your agreement based on your specific needs, and have it reviewed by an attorney. You can also access legal advice from experienced lawyers if needed.
In conclusion, an LLC operating agreement is a crucial legal document that every LLC owner should have. With the help of online legal services like Rocket Lawyer, creating one is quick and affordable. So, don`t wait any longer, get started today!