Jerry Jones CPA
Wouldn’t it be nice to have a CPA that you deal directly with, that understands your business, that works in all 50 states and is there for you when you need him?
“Jerry has been doing my individual taxes for the past 7 years. He must be doing OK since I haven’t been audited or had to pay any fines. In addition to my regular taxes, Jerry completed the final returns for my mother’s Living Trust in California. Before taking on this task Jerry let me know that he hadn’t handled a trust, especially in California for a long time. This required Jerry to make the extra effort to research and consult with a lawyer to successfully file the IRS and California returns and to close the financial requirements of the trust. I highly recommend Jerry’s services".
Leif L., Taxpayer

Why Every LLC Needs an Operating Agreement

llc operating agreement financial planningMany business owners make the choice to operate as a limited liability company (LLC) for the personal liability protection this business entity provides. Beyond that, they may not give much thought to creating an LLC operating agreement since most states have LLC laws with default provisions that dictate how the LLC will be managed.

However, your state’s default provisions may not be the right fit for how you want your company to operate.

You want an operating agreement that defines where you and your business are going in the future.

For example, many states provide that the voting power of each LLC member should be in proportion to their investment in the company. This may not necessarily work for you, especially if you want to recognize the “sweat equity” contribution of a member as equal to another member’s financial contribution.

According to most states, LLC default provisions force members the ability to transfer their interest in the LLC as unrestricted. This is something you may not want to pursue with a partner in your business if you don’t know or don’t care to deal with as a member of your LLC.

An LLC operating agreement can also help members avoid costly and stressful events, including:

  • Disputes among members on rights and responsibilities of each owner. An operating agreement will detail the specific rights and responsibilities of each LLC owner so there is no confusion.
  • Harm that could arise from state default laws. State default laws are one-size-fits-all, which may not be a good fit for your company. If your state laws dictate that corporate actions are subject to a unanimous vote by members, and you have problems getting everyone to agree, this could hamper the growth of your company. An operating agreement allows you to create custom rules for the operation of your LLC.
  • Disputes that arise due to lack of clarity. Many state default laws do not adequately address disputes. By preemptively planning for potential scenarios that could arise, such as the need for capital and the responsibilities of each member to provide it, you can address these in advance so each LLC member knows what to expect, thus avoiding potential disputes in the future.

One of our primary services is a LIFT Start-Up Session, in which we guide you through the right choice of business entity, location of business entity, start-up agreements, intellectual property protection, employment structuring, insurance, financial and tax systems you need to start your next business and succeed right out of the gate. Contact us today to learn more about our LIFT Start-Up process for your business.

Contact us now to see how we can work together to ensure that your business is built on a solid legal, insurance, financial and tax foundation, AND that you build and create your business from a place of certainty, clarity and in complete alignment with who you really are.

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