Scarinci Hollenbeck, LLC
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Author: Scarinci Hollenbeck, LLC
Date: April 19, 2013
The Firm
201-896-4100 info@sh-law.comAn operating agreement is essential to the smooth operation of an LLC because it governs the company’s financial and business decisions. For the members of the LLC, an operating agreement has several advantages. Most importantly, it provides evidence that the company is truly an LLC and not a sole proprietorship or partnership, and thereby helps shield members from personal liability. Moreover, having a written agreement in place not only helps avoid disputes, but also outlines how they will be resolved when they do arise.
In the absence of an Operating Agreement, the rights of members of a New Jersey LLC defaults to the controlling provisions of the statute- which may or may not accord with the intentions of the members. And even though you may already have an Operating Agreement, with the passage of a revision to New Jersey’s LLC statute that became effective March 18, 2013, you may have overlooked some of the provisions that you might want to include to avoid having the statutory provisions control.
While many “standard” operating agreements are available, to gain the most benefit and make sure the members’ legal interests are protected, the contract should be tailored to meet the needs of the company. Below are a few key issues that should be addressed:
If you have any questions about LLC operating agreements or would like assistance drafting one for your business, please contact me, Mark Follender, or the Scarinci Hollenbeck attorney with whom you work.
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