What details are required when writing an LLC agreement?


Quick Answer

A limited liability company operating agreement should include detailed information on what percent of the company each member owns, as well as a breakdown of profit and loss sharing for each owner, states FindLaw. It is also important to include what should occur if one of the owners leaves the company.

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Full Answer

To avoid issues, an LLC operating agreement should include information on decision making for the business, including information on the voting rights of each member and rules for meetings and voting, explains FindLaw. For example, an LLC operating agreement may state an official company meeting may only take place when the majority of the members are present. An agreement might state if each member's vote has equal weight, or if one member has more voting power than another correlating to the percentage of ownership.

Other important information to include in an LLC operating agreement includes the rights and responsibilities of each owner, a management plan or structure for the business, and a set of rules for transitions of ownership in the event of a buyout or death of one of the members, states FindLaw. An operating agreement may also include rules on the distributive share, such as how much of the distributive share a member may withdraw and when a member may withdraw his share.

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