Registering an LLC in California: Preparing an Operating Agreement

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Preparing an Operating Agreement to Register an LLC in California

There are a number of important steps required to successfully register a Limited Liability Company (LLC) in California. Hiring an experienced attorney will help ensure each of these steps is completed properly.

One important step is to prepare an operating agreement. While this step is not mandatory to form an LLC in California, it is very helpful as it blueprints the structure and operation of the LLC and may help avoid other legal disputes in the future.

What Is an Operating Agreement?

An operating agreement is a legally enforceable contract detailing how an LLC will be structured and how it will operate. In creating an operating agreement, LLC owners have a significant amount of freedom in determining how they would like the LLC to be structured and function.

What Information Goes Into an Operating Agreement?

A number of issues arise when an LLC is created – especially when there are multiple owners. To resolve these issues, most operating agreements will detail:

Why Is an Operating Agreement Beneficial?

Preparing an operating agreement has many significant benefits. As detailed above, the operating agreement will eliminate any confusion about how the LLC will be managed and function. Further, it strengthens the legitimacy of the LLC entity and may protect owner’s limited liability status if any legal disputes arise.

Contacting an Attorney

While some portions of an operating agreement are relatively straight forward, an experienced business attorney will help identify less intuitive issues that may need to be addressed for different types of LLCs. Additionally, an experienced attorney can help match best LLC practices to meet the specific needs of an LLC to help it be successful in its operation.

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Last Modified: 12-11-2013 10:22 AM PST

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