Earlier this week I attended the Oklahoma 2nd Amendment Association meeting, and Don Spencer, their President, asked me to come up and speak about a matter. This was totally impromptu, but I obliged. After the meeting, a nice lady came up to me, and we talked about how she was interested in possibly restructuring her small business. So, in today's Freedom Friday blog and email newsletter, I want to answer the question, “Help! How can I restructure my small business?”
First of all, what do I mean by restructuring a small business? Usually this means that either you need to add a member to your LLC, someone needs to leave your LLC, or maybe you need to dramatically change your small business structure for another reason. All of these situations would be restructuring your small business, legally speaking, and you need some help getting that done. In today's Freedom Friday blog and email newsletter, I want to share four (4) steps to legally restructure your small business:
1. Decide If You Need to Start Over
Sometimes, the right decision is to dissolve your current business structure, be it an LLC or something else, and start over with a new name, a new business entity, and a new business entity. This is the first step to legally restructuring your small business. If you and your current business partner are wanting to separate, and both of you are willing to wind down and dissolve your current business to start over, then you can start here, and then form a new LLC with a new name and a new operating agreement. Otherwise, you need to move on to Step 2.
2. Your Operating Agreement is Essential
The second step in legally restructuring your small business is to review your operating agreement, because your operating agreement is essential. It's very important to have an operating agreement, even if you're a single-member LLC. For instance, if you're a single-member LLC, and you want to add a member or two to your LLC, you need to have a legal path in your operating agreement to do so. This is the time to consult with an attorney who can review your operating agreement or create one for your small business if you don't have one already, so that you can move forward and restructure your small business in the right way. A solid operating agreement will clearly tell you how you can add a member or members to your LLC, or how to handle a situation if a member needs to leave the LLC.
3. Do What Your Operating Agreement Tells You To Do
The third step in legally restructuring your small business is to do what your operating agreement tells you to do. Is it that simple? Yes, it really is that simple. In most instances, the operating agreement will require the “consent” of the existing member or members of the LLC. This means you will need to have a written “consent resolution” to add the member or members to your LLC, or to allow for a certain member to leave, or whatever specific restructuring you need to take place. If you're working with an attorney on these issues, he or she can draft the consent resolution for your small business to help with the transition process.
4. Update Your Operating Agreement
The fourth and final step in legally restructuring your small business is to update your operating agreement. Once you have successfully added a new member or members to your LLC, or a member has left your LLC, your operating agreement needs to be updated to reflect the changes in the membership of your LLC. All the current members of your LLC need to sign the new operating agreement which will guide your small business moving forward. Once again, it's a very good idea to consult with an attorney to update your operating agreement at this stage in the process.
If you are interested in starting a small business anywhere in Oklahoma, or you are interested in taking your small business to the next level, please contact me at [email protected] to schedule a FREE strategy session.
For more information about Liberty Legal Solutions, LLC, please visit our website at http://www.libertylegalok.com/