If you have recently created a limited liability company, you are likely well on your way to getting as many necessary documents completed as soon as possible, particularly those that are required under Kentucky state law. It may also be prudent to consider creating certain documents that are not necessarily required under state law but that could prove valuable, nonetheless.
For example, creating an LLC operating agreement could be worthwhile. Though state law does not require this document, it can contain various information and agreement terms that could help protect you and your company. Having this agreement on record could even act as a safeguard should a dispute arise, depending on the circumstances.
What should the agreement include?
This agreement can house a significant amount of important information regarding the operations of your company. Some of the information can act as an introduction to the company and include the LLC’s name, details regarding the Articles of Organization you filed with the state, the purpose of the business, its duration and more. The agreement can also include information about the LLC’s members and ownership interests. The following are a few details to include on that front:
- Names of the original members
- The percentage of ownership interest each founding member has
- The number of monetary contributions each founder will make or has made
- How new members will be accepted
- Circumstances under which additional contributions from members may be required
It is also wise to include management information in the document, particularly whether one or more members will manage the company or if the company will hire an employee to act as manager. You may also want to include stipulations stating that, even if the company hires an outside party to act as the manager, the members of the LLC still have power to approve certain decisions before they can move forward.
How can you create the agreement?
Though an operating agreement is not legally required in Kentucky, you still want to ensure that the document is legally binding. If it is not, it may not offer as much protection in the future as you would hope, should the need for it arise. Fortunately, you can gain more information and insight into how to create a legally binding document and protect your company as best as possible.