Whether you are still in the planning stages or your business has taken off like a rocket, there are five contracts you need to have at the ready to take advantage of business opportunities as they arise, while still protecting your business.
In this series, we will look at the top five most commonly requested business contracts, including LLC operating agreements, partnership agreements, corporate bylaws, employment agreements, and independent contractor agreements.
We recently discussed the benefits of choosing to form an LLC as your legal business entity. In this article, we will consider LLC operating agreements and point out the essential elements to look for.
An LLC operating agreement is different from the articles of organization. While an operating agreement is not technically required to form an LLC in Pennsylvania, if an LLC has two or more members it is strongly recommended that the all of the members sign a written operating agreement.
At a minimum, your LLC operating agreement should set forth each member’s ownership interest in the LLC, how and when profit distributions will be made, the extent of each member’s day to day management duties, what will happen to the LLC if a member decides to leave, and any other member rights and responsibilities specific to your LLC.
An important point to remember is that Pennsylvania’s default LLC operating rules will apply in the absence of an operating agreement. Setting out a written operating agreement up front allows you to avoid the default rules and can save the expense of costly litigation and ruined friendships in the future.
To have an attorney draft or review your Pennsylvania LLC operating agreement, or for help with another matter related to your business, call Scolieri Law Group, P.C. Located in western Pennsylvania, our attorneys are experienced in Pennsylvania business law and can help you navigate contracts, business formations, and other matters affecting your business. Contact us today at (412)765-0546 or firstname.lastname@example.org.