In this week's Freedom Friday blog and email newsletter, I want to talk about a topic that I recently discussed with a prospective client, and that is legally restructuring your small business. What this usually means is you need to change your business structure in a significant. Perhaps you need to add a member to your LLC, or a member needs to leave your LLC, or maybe you need to dramatically change your business structure. All these options would be restructuring your business, legally speaking, and you need some help getting that done. In today's Freedom Friday blog and email newsletter, I want to share three (3) steps to restructuring your business, legally.
1. Your Operating Agreement is Essential
The first step in restructuring your business is to review your operating agreement. This is why it is very important for you 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 members 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 you if your LLC doesn't have one already), so that you can move forward and restructure your business 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 the situation if a member needs to leave the LLC.
2. Do What Your Operating Agreement Tells You To Do
The second step in restructuring your business is to do what your operating agreement tells you. Is it that simple? Yes, it really is. In most instances, the operating agreement will require the “consent” of the existing member or members of the LLC. This means that you will need to have a written “consent resolution” to add the member or member(s) to your LLC, or to allow for a certain member to leave, or whatever specific restructuring you need to take place. If you are working with an attorney through this process, he or she can draft the consent resolution for your business to help with the transition process.
3. Update Your Operating Agreement
The third step to restructure your 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 the LLC. All the current members of the LLC need to sign the new operating agreement which will guide the business going forward. Just like in the first step, it is 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 if you have a small business and you are looking to grow, 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/