A New Series - What’s Missing from Your LLC Operating Agreement?

Table of Contents

Introductory Article
 1. What Is Missing From Your Operating Agreement?

Ownership & Management Structure
 2. Does Your Operating Agreement Provide for Management by Managers or Members?
 3. Does Your Operating Agreement Allocate Ownership Interests in Terms of Membership Units or Percentage Interests?
 4. Are Membership Units and Stock the Same or Different?

Membership Changes & Transfers
 5. Does Your Operating Agreement State How a Person Can Cease Being a Member by the Company or Other Members Buying the Membership Interest?
 6. Does Your Operating Agreement Address How and When a Member Wants to Sell or Transfer Their Interests to a Third Party?

Decision-Making & Voting Rights
 7. Does Your Operating Agreement Explain When a Member’s Consent Is Required for Significant Company Decisions?

Life Events & Member Protections
 8. Does Your Operating Agreement Cover What Might Happen if a Member Gets Divorced, Becomes Disabled, or Dies?

Capital Contributions & Financial Considerations
 9. Does Your Operating Agreement Address When Members Are Permitted or Required to Contribute or Withdraw Capital?
 10. Does Your Operating Agreement Provide for Tax Distributions?

Issuing Additional Equity & Membership Rights
 11. Does Your Operating Agreement Address When Additional Equity May Be Issued by the Company?
 12. Does Your Operating Agreement Have Multiple Classes or Series of Membership Units?

Dispute Resolution & Legal Protections
 13. Does Your Operating Agreement Address How and Where Disputes Are Resolved?
 14. Does Your Operating Agreement Include Representations and Warranties Relating to Federal Securities Laws?
 15. Does Your Operating Agreement Require Members to Disclose or Forego Any Conflicting or Competitive Business Interests?

Restrictive Covenants & Intellectual Property
 16. Does Your Operating Agreement Have Restrictions for Competition, Solicitation, and Disclosure?
 17. Does Your Operating Agreement Clarify Outcomes When an Employee-Member Is Terminated?
 18. Does Your Operating Agreement Require Members Actively Involved in the Business to Assign to the Company All Intellectual Property They Create in the Course of Business?

Selling & Exit Strategies
 19. Does Your Operating Agreement Address When Most but Not All of the Owners Want to Sell Their Ownership Interests to a Buyer?
 20. Does Your Operating Agreement Address When a Buyer Wants to Purchase a Controlling Stake in the Business From Some but Not All of the Existing Owners?