More and more small businesses are opting to operate as Limited Liability Companies, or LLC’s. LLC’s are formed by filing a Certificate of Organization. Such Certificates generally include the following: (a) the name of the LLC; (b) the registered office address or agent for the LLC; (c) the name and address of each organizer; (d) whether a member's interest is to be represented by a certificate; (e) how the LLC is to be managed; (f) if the certificate has a delayed effective date, the effective date of formation; (g) if the LLC is a restricted professional company, a statement to that effect, including a description of the restricted professional services rendered; and (h) any other provisions that the members elect to include in the Certificate.

The LLC and its owners, also referred to as “members”, are governed by the particular state’s Limited Liability Company Act. The various Acts generally permit LLC’s to make and alter operating agreements for the administration and regulation of their affairs so long as the provisions do not conflict with existing law. An operating agreement is the members' agreement concerning the LLC's affairs and the conduct of its business.

We routinely draft operating agreements, particularly with multi–member LLC’s, that address, among other things:

• the management of the LLC;
• the capitalization of the LLC and member capital contributions;
• the distribution of profits and losses of the LLC;
• the termination or dissolution of the LLC;
• the transferability of members’ ownership interests in the event of death or divorce;
• the protection of members’ personal assets from corporate debts and obligations;
• the rights and duties of members and managers;
• the admittance of additional members;
• the disassociation of members.