How I Help: Operating Agreements and Dispute Resolution
I was recently working with two accountants and sisters, who have been working at different accounting firms. They’ve decided to form a firm together, primarily focused on tax preparation and planning.
I helped them set up their LLC and guided them on how to document their relationship with an Operating Agreement.
Some of the important elements of the operating agreement are easy: how much will they contribute to the start the business, how they will distribute the income and how they’ll divide up the management responsibilities.
But there are also many critical elements that can be difficult to decide: for example, how disputes will be resolved. It's always good to describe a dispute resolution framework in the agreement. You'd be surprised how many operating agreements are missing this important provision.
I’ve been a business lawyer long enough that, when working with clients on any agreement, I can suggest not only legal but also commercial alternatives that clients haven’t considered.
Have you ever used a contract as leverage to get what you wanted? It's critical to have options and flexibility in a contract, because the future is unpredictable.