If you’re looking to start a business in Oklahoma, an LLC might be one of the best business structures to choose. This is because it offers sufficient flexibility and protection for the owners. However, to get the most out of your LLC, you need to have an operating agreement in place. Keep reading to learn more about what this is, why you need it, and what you should include in it.
What is an operating agreement?
An LLC operating agreement is a legal document that outlines the ownership and operations of an LLC business formation. This document is filed with the Oklahoma secretary of state when you form your LLC. It sets forth the rights and responsibilities of each member and how to share profits and dissolve your company, among other critical components of your business.
Why is an operating agreement important?
• It ensures everyone in the company understands their roles and responsibilities: The operating agreement lays out the ownership structure of the LLC and how you’ll make decisions. This can help prevent disagreements down the road.
• It establishes what will happen if the business is dissolved: This can be important if one of the members decides to leave or if facing financial problems. Without this agreement, dissolving the LLC could be a long and complicated process.
• It can help your business get funding: Investors often ask for an operating agreement when considering putting their money in a company. If you have one, you can give your investors the confidence they need to take the risk of spending their money on your business.
What must you include when preparing an LLC operating agreement?
The following should always be included when preparing your operating agreement:
1. The name of members
2. The roles and responsibilities of each member and voting rights
3. How you’ll conduct your meetings
4. How you’ll distribute your business’ profit and losses
5. Buyout and buy-sell rules
Creating an LLC operating agreement is not as difficult as you might think. You can find templates online or hire an attorney to help you draft one. However, it’s important to ensure that your agreement is tailored to your specific business. Be sure to include all pertinent information to prevent costly and time-consuming disputes in the future.