I recently wrote about the importance of creating an Operating Agreement for LLC’s (Limited Liability Companies). While no state actually requires an LLC to have an Operating Agreement, it’s an essential document for managing the company in the years ahead. The Operating Agreement is much like corporate bylaws: it sets the rules for how the company will be governed; it spells out how decisions are to be made and everyone’s roles and responsibilities. By doing so, it can help prevent conflict and misunderstandings among owners.
Whether you hastily drew up your Operating Agreement when you first launched your business, or you carefully reflected on every word with a lawyer, the fact is that any business evolves over its lifetime and situations will change. You need to make sure that your original Operating Agreement is continually updated to reflect these changes.