When starting a business with more than one owner, having a company operating agreement in place is crucial. This document outlines the structure, rules, and processes that will govern the company.
Here is an example of a company operating agreement:
Article I: Name and Purpose
This section identifies the name of the company and its purpose.
Article II: Ownership
This section outlines the ownership structure of the company, including the percentage ownership of each member and how ownership can be transferred.
Article III: Management
This section outlines the management structure and how decisions will be made. It also outlines the roles and responsibilities of each member, including any limitations on their authority.
Article IV: Meetings and Voting
This section outlines the procedures for holding meetings and voting on company matters. It also outlines the quorum necessary for decisions to be made.
Article V: Capital Contributions
This section outlines each member`s capital contributions to the company, including how and when they will be made.
Article VI: Profits and Losses
This section outlines how profits and losses will be allocated among the members of the company.
Article VII: Distributions
This section outlines how profits will be distributed to the members and any limitations or restrictions on distributions.
Article VIII: Dissolution
This section outlines the procedures for dissolving the company, including how assets will be distributed and any liabilities that will need to be settled.
Article IX: Amendments
This section outlines the procedures for amending the operating agreement, including how and when changes can be made and what percentage of members must approve them.
Having a well-written company operating agreement is essential to the success of any business with more than one owner. It helps to ensure that everyone is on the same page and that there are clear procedures in place for decision-making and conflict resolution. If you`re starting a business with others, be sure to consult with a lawyer and draft an operating agreement that works for everyone involved.