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What Is an Operating Agreement?
An operating agreement is a legal document that sets out how a limited liability company (LLC) is owned, managed, and run. This document is a practical tool that guides fundamental matters like decision-making, ownership changes, and day-to-day authority within the business.
A well-structured operating agreement protects each member from personal liability and shows lenders, investors, and partners that the company is organized and prepared.
When the Sequoia Legal team drafts a Colorado LLC operating agreement, we typically cover the following:
- Management structure and voting rights
- Member capital contributions and future funding
- Profit and loss allocations and timing of distributions
- Buyout terms if a member leaves, becomes disabled, or passes away
- Transfer restrictions, noncompete clauses, and non-solicitation provisions
- Procedures for resolving member deadlocks and internal disputes
Once signed by all members, your operating agreement serves as internal law for your LLC. It does not need to be filed with the state to take effect.
What Is a Partnership Agreement?
A partnership agreement is a critical document that explicitly details how a business is to operate, as well as the roles and responsibilities of each partner. Any business with two or more partners needs to have a well-thought-out partnership agreement so the partners have a clear understanding of their obligations and rights regarding profit and loss.
A partnership agreement also helps avoid potential problems and provides a means for resolving disputes. Businesses without an agreement will risk facing crippling disputes and losing time and money thanks to inefficient dispute resolution methods.
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Why Do You Need to Hire an Experienced Operating Agreement and Partnership Attorney in Denver, CO?
A skilled operating agreement and partnership attorney can help set a business up for success from day one. Most entrepreneurs are aware of the risks involved in starting a company, but an attorney can anticipate and mitigate these risks through careful contract wording and clear agreement formation.
When drafted by an experienced attorney, an operating or partnership agreement safeguards a business against challenges that threaten to reduce profits and hinder productivity. This approach not only saves time but also helps prevent costly litigation.
Types of Partnership or Operating Agreements We Can Help You With
When it comes to business partnerships, various legal issues can arise. At Sequoia Legal, we're no strangers to these issues. Our business attorneys regularly contemplate these issues when helping to plan and execute the partnership agreements that are essential for businesses.
No matter what your business objectives are, we can help you accomplish them through a range of business law services, including but not limited to:
- Planning partnership and operating agreements according to Colorado law
- Resolving personal liability issues
- Advising on business partnerships
- Giving advice regarding limited liability companies
- Planning and formation of business contracts
- Providing business and liability advice for business partners
- Devising business entity structuring and dissolution agreements
- Drafting business partnership agreements
- Giving guidance pertaining to partnership disputes
- Giving guidance regarding compensation and your partnership interests
No matter what your needs may be, our business lawyers have the experience and passion to help ensure that you thrive in your business efforts and that your exposure to precarious business liability remains low.
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