If you are thinking of forming a Limited Liability Company (LLC), there are certain legal documents you must prepare to formalize the business structure. One of these documents is the LLC Operating Agreement, which outlines how your business will run and identifies the roles and responsibilities of its members.
To ensure your LLC Operating Agreement accurately reflects your business goals and that you have not missed any crucial details, it is recommended that you complete a LLC Operating Agreement questionnaire. This questionnaire will act as a guide and help you identify important aspects of your business, which will be translated into your Operating Agreement.
Here are some key questions you can expect to find in a typical LLC Operating Agreement questionnaire.
1. Business Details: What is the name of your LLC, and what is your business purpose? What state will you register your LLC in, and where will the primary business location be?
2. Membership Information: Who are the members and managers of your LLC? What is their contribution to the business, and how will you allocate profits and losses?
3. Capital Contributions: How much capital will each member contribute to the business, and how will these contributions be paid?
4. Voting and Decision Making: How will voting occur within the LLC? Will each member have equal voting rights, or will voting power be allocated based on a member`s capital contribution? How will decisions be made, and what percentage of member votes is required to approve changes?
5. Management and Operations: How will the LLC’s operations be managed? Will there be a designated manager, or will all members have an equal say in decision-making? Will there be different departments, and how will duties be assigned?
6. Transfer of Membership: How can members transfer or sell their ownership percentage? Will the LLC have a right of first refusal if a member decides to sell their interest, or will the LLC allow members to sell their shares to third parties?
7. Dissolution: What happens if the LLC dissolves, and how will the assets be divided among members? Who will handle the winding up of the LLC`s affairs and ensure all debts and obligations are satisfied?
Completing an LLC Operating Agreement questionnaire will help you create a tailored Operating Agreement that reflects your business’s unique needs and goals. It is important to consult a lawyer experienced in LLC formation to make sure all necessary elements are covered and the Operating Agreement is legally binding.