Frequently Asked Questions About Operating Agreements in Los Angeles
Operating agreements are a critical document for any business entity, regardless of size or location2 min read
Operating agreements are a critical document for any business entity, regardless of size or location. This legally binding document outlines the roles and responsibilities of each member and provides a roadmap for how the business will be handled. Businesses in Los Angeles have additional requirements when creating an operating agreement due to the unique investor and regulatory structure of the city. UpCounsel’s network of local, experienced lawyers can help corporations in Los Angeles craft a comprehensive agreement that meets their needs and complies with the law.
Before crafting an operating agreement, business owners should familiarize themselves with the basic tenets of a legally valid contract. First, the parties must mutually consent to the terms of the agreement. Second, the agreement should be made in writing to avoid disputes should a conflict arise. Third, consideration - or something of value - must be exchanged between both parties in order for the agreement to be enforceable. Fourth, the agreement must comply with all relevant local, state, and federal regulations.
A comprehensive operating agreement should provide a roadmap for how a company is managed. It should indicate which entity type the company has chosen - such as an LLC or corporation - and state the rights and responsibilities of each party involved. It should also define the roles and duties of board members and managers, and specify the ownership structure and voting rights of the shareholders or members. Additionally, the agreement should include provisions to address the sharing of profits and losses, as well as how disputes between members are to be handled.
Businesses in Los Angeles must also include certain provisions in their operating agreement in order to comply with local regulations. California is uniquely obligated by statute to mandate certain provisions related to the dissolution of a business and the transfer of shares of a corporation or membership interests of an LLC. Furthermore, businesses in Los Angeles may need to include extra provisions such as non-compete clauses and restrictive covenants between investors and shareholders in order to protect the interests of the respective parties.
UpCounsel’s network of experienced attorneys are capable of assessing the unique needs of Los Angeles businesses and crafting a comprehensive operating agreement which will protect the interests of all stakeholders. When creating an operating agreement, it’s important to have an experienced attorney reviewing the contract on behalf of the company, ensuring that it meets all local, state, and federal regulations while providing the flexibility that the company needs.
Increasingly, business owners are turning to UpCounsel for their attorney needs. Our online platform allows companies to select from thousands of experienced lawyers who have been screened and rated for their respective specialties. Our rates are highly competitive and our services are tailored to meet the needs of businesses of all sizes. Whether you need a one-time consult or a full-time legal team, UpCounsel has you covered.