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What Should Be Included in an LLC Agreement?
One of the most popular types of business formation is a limited liability corporation, often referred to as an LLC. When you are establishing an LLC, it is important to consider also establishing an operating agreement, especially if you have other members in your company. While these agreements are mandatory in some states, they are not mandatory in Florida.
What Should Be in the LLC Agreement?
This agreement will outline the specific duties and needs of each member, as well as specify what the decision-making process will be when it comes to both how the company operates and decisions regarding finances. In addition to the identifying information of the LLC, the following are important terms to be aware of when you are entering into the agreement.
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Business purpose – One of the first things that should be addressed in your LLC agreement is the purpose of the business.
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Statement of intent – Every LLC agreement should include a section that states the agreement is in compliance with the laws of the state of Florida and that the LLC will be officially formed once all the required forms and documents have been filed.
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Corporate governance – If there is more than one member in the LLC, then the agreement should address the formation of the board members, how the members will be selected, and what the duties and powers of each member are.
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Financial interest – The LLC agreement should also stipulate what each member’s percentage of ownership of the company is and if differences in ownership percentage impact the rights of the members. It should also address how the members will be paid.
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Arbitration – At some point during operation, every company has issues that arise that can cause disagreements between members. The LLC agreement should provide how those disputes will be addressed, especially in situations where one or more members are threatening to file a lawsuit.
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Dissolution of the LLC – If the members of the LLC decide it is time to dissolve the company, the agreement should provide direction on what types of circumstances will warrant a dissolution. Some agreements even include a clause addressing whether a lawsuit can be filed by a member to request that a judge order the dissolution if the members are not in agreement.
Contact a Broward County Business Lawyer for Legal Assistance
If you are forming a business, our law firm can assist you in helping you decide which type of business formation is your best option, as well as assist in all the documents and filings that may be required. Call The Elliot Legal Group, P.A. at 754-332-2101 to schedule a confidential consultation with a skilled Fort Lauderdale, FL business attorney.
Sources:
https://www.investopedia.com/terms/l/llc-operating-agreement.asp
https://www.forbes.com/advisor/business/florida-operating-agreement-llc/
