Sorting out your company’s owners’ exit strategy is one the most important considerations when forming an LLC. It may sound odd, but deciding how to get out of your small business in the beginning will save you and your business partners time and money down the road. When it comes to LLCs, one of the primary benefits is flexibility when drafting the operating agreement. This can be especially important when deciding on exit strategies, restrictions, and procedures for your small business. Today’s post highlights some of the more common exit provisions in an LLC operating agreement.

Buy sell provisions detail what will happen when a member of the LLC decides to leave the business, dies, or is otherwise unable to continue…

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I’ll set the stage: Two friends decide to start a business. They’ve been friends for years. They see eye to eye on just about every issue, including how the business should be formed and managed. They are ready to start selling, making money, and growing their idea into a sustainable business. They’ve decided that each partner has an equal stake in the business and will receive equal compensation. They want it to be simple, no lawyers, no accountants, no additional partners, etc. To seal the deal they cheers their beers to the future. You get the picture.

Get it in Writing Because The Future is Unpredictable 
Both partners trust each other, and neither has any reason to believe that their relationship will…

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I often talk with small business owners about exiting their businesses. Most of the time, there’s no buy sell agreement and the business owner just wants to be “bought out” at a “fair price.” If all owners agree on terms, the separation can be quick and easy. However, this is rarely how it actually plays out. Instead, owners tend to butt heads and struggle to determine a reasonable price for buying out the withdrawing owner. In some situations, the owners can’t decide on reasonable terms of separation and as a result the business suffers. In order to avoid this mess, it is important that you understand the importance of putting together a simple buy sell agreement. Today I’m revisiting some…

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You’ve started to finalize all the details to form your LLC. You’re getting ready to file your Certificate of Formation, and you’re trying to decide whether your new venture will be managed by one or more managers or by all the members of the company. In order to do so, you’ll need to understand the difference between a manager-managed LLC and a member-managed LLC.

Flexible and Easily Adaptable
One of the most appealing characteristics of the LLC form is that virtually all aspects of the business can be structured the way you want. State statutes essentially allow the company to structure the day-to-day operations of the company according to the wishes of the owners, so long as such wishes are set out…

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