About Operating Agreement
An Operating Agreement is a foundational document used to establish the internal governance, ownership, management, financial arrangements, and operating rules of a limited liability company (LLC).
A carefully prepared Operating Agreement can help define the rights and responsibilities of members, establish decision-making procedures, address financial arrangements, and provide a framework for managing changes in ownership or the operation of the business.
Tonnie Kariuki Law provides Operating Agreement drafting and review services tailored to the structure, activities, ownership arrangements, and objectives of your LLC.
What the Document Can Cover
Depending on the structure of the LLC and applicable legal requirements, an Operating Agreement may address:
- Identification of the LLC and its members
- Ownership percentages and membership interests
- Capital contributions
- Additional capital contributions
- Allocation of profits and losses
- Distributions
- Management structure
- Member-managed or manager-managed arrangements
- Management powers and responsibilities
- Voting rights
- Major business decisions
- Member meetings and procedures
- Admission of new members
- Transfer of membership interests
- Restrictions on transfers
- Withdrawal or resignation of members
- Buyout arrangements
- Death or incapacity of a member
- Dissolution and winding-up
- Dispute resolution
- Confidentiality obligations
- Intellectual property arrangements where applicable
- Non-solicitation or other protective provisions where appropriate
- Amendments to the agreement
- Notices
- Governing law
- Other provisions appropriate to the LLC
Drafting and Review Services
Our Operating Agreement services may include:
- New Operating Agreement drafting
- Existing Operating Agreement review
- Single-member LLC agreements
- Multi-member LLC agreements
- Member rights and responsibilities
- Management and voting provisions
- Capital contribution provisions
- Profit and loss allocation provisions
- Distribution arrangements
- Membership transfer restrictions
- Buy-sell and exit arrangements
- Amendment and restatement of existing agreements
- Coordination with related business documents
Why an Operating Agreement Matters
A well-structured Operating Agreement can provide clarity regarding how an LLC is owned and operated.
It can help reduce uncertainty by establishing agreed procedures for decision-making, financial arrangements, ownership changes, member responsibilities, and significant business events.
For businesses with multiple members, clearly documented rights and responsibilities can also help reduce the potential for disputes arising from misunderstandings about ownership, management, voting, or distributions.
Who May Need an Operating Agreement?
Operating Agreements may be relevant to:
- Startup founders
- LLC owners
- Single-member LLCs
- Multi-member LLCs
- Business partners
- Investors acquiring membership interests
- Family-owned businesses
- Joint ventures structured as LLCs
- Existing businesses updating their governance arrangements
Request Operating Agreement Services
Contact Tonnie Kariuki Law to discuss your LLC’s ownership structure, management arrangements, business objectives, and documentation requirements.
We can assist with preparing a new Operating Agreement or reviewing an existing agreement to identify provisions that may require clarification, revision, or additional protection.