A limited liability company (LLC) is a great choice for your business because it combines the best aspects of corporations and partnerships. LLC owners—known as members—enjoy pass-through profits to avoid the double taxation of corporations and are also afforded more protection from company liabilities than general partnerships.
LLCs are also popular because they avoid the extensive documentation, the reporting requirements, and the annual share-based registration fees of corporations. While you do not need to file an operating agreement with the state, we strongly recommend adopting one. Creating an operating agreement in Virginia is your guarantee that the company will be governed the way the owners determine in negotiations.
LLC members can be individuals, corporations, other LLCs, or trusts. Members often contribute assets (called capital contributions) to launch the company. Capital contributions can be in cash, real estate, intellectual property, or expertise, which determines the members’ opening ownership interest.
A well-drafted LLC operating agreement is specific and detailed because it is the roadmap for managing, growing, and selling the company. When members reach stalemates and infighting begins, the agreement should have the answers to resolve the problems. Some of the basics your operating agreement should include are:
Additional information should include how and who will manage the daily operations, including:
The agreement should also define:
Oftentimes, unexpected disputes arise when members want to sell, retire, breach their fiduciary duty, or get a divorce. A good LLC operating agreement in Virginia will provide buy-out and transfer provisions that help the company smoothly navigate unexpected conflicts. Other times, it is new investment or sale opportunities that create uncertainty around buyouts or buy-ins. Whether in the good times or the tough times, a good operating agreement provides clarity and stability.
Creating an operating agreement in Virginia can be as simple as letting our seasoned business formation attorneys guide you along the way. With our Handshake Portal, we combine technology and years of experience to provide a simple and affordable process for crafting the right operating agreement for your business. Contact us online today.
When setting up your company or preparing business agreements, a well-practiced Virginia business lawyer could help save you from future headaches and costly litigation.
The legal professionals at our firm use our Handshake Portal to help get you started in the right direction for your contractual needs without the complicated legal jargon. To help minimize your legal costs, we provide these services at a fixed fee rate. Contact us today to schedule a consultation and get started.
