A limited liability company (LLC) is a distinct legal entity, like a corporation. This allows the LLC to conduct business, open a bank account, and receive a tax identification number. The main advantage in forming an LLC is to create limited liability for its owners (known as “members”). Under most circumstances, members are not personally responsible for the LLC’s liabilities and debts.
Learn more about LLCs and whether this business entity is right for your company by contacting the Utah business lawyers at Pearson Butler. The firm’s attorneys are experienced, knowledgeable, and ready to help.
Is an LLC Operating Agreement Necessary?
It is typically prudent to create an LLC Operating Agreement, particularly if the business has two or more members. This can help clarify members’ expectations in the business to prevent future problems or disputes. While some default rules apply to LLCs, a well-drafted LLC Operating Agreement gives its members more flexibility to delineate rights and obligations of the LLC, its management, its members, and various other considerations.
Examples of provisions in an LLC Operating Agreement may include the following, and more:
- Who owns the LLC
- Who contributes to the LLC
- Who receives the profits
- When profits are distributed
Establish Your LLC with a Skilled Attorney
Pearson Butler has extensive experience setting up LLCs and crafting LLC Operating Agreements for businesses across Utah. If you are an existing business owner and have not set up an operating agreement yet or feel that it may be time to modify the agreement, or if you are preparing to undergo business entity formation, now is the time to seek counsel from a seasoned Utah LLC attorney. Call Pearson Butler today at (800) 265-2314.