Can anyone share operating agreement templates ?
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by a searcher
from Harvard University - Harvard Business School
in San Jose, CA, USA
in San Jose, CA, USA
5yrs ago
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by a professional
5yrs ago
from University of Minnesota in Minneapolis, MN, USA
from University of Minnesota in Minneapolis, MN, USA
A good operating agreement should be no more or less complex than is necessary. A business with two owners at 50/50 with equal contributions is going to have a very different OA than a business with an owner who also serves as the CEO with a 25% stake and board of passive investors who may not be concerned with anything other than dividends.
My primary advice is to make sure that your OA addresses the 3 most common areas where issue arise within closely-held businesses: 1) Money (who gets paid what and how is that decided? What happens if we need more capital?), 2) Power (who makes the decisions generally? How are votes allocated? When do we need majority/super-majority/unanimous consent on a business decision?) and 3) Succession Plans (what happens if an owner dies/declares bankruptcy/doesn't want to be an owner any more? How will the Company retain ownership with adequate flexibility to maintain daily operations of the Company? What if an owner/employee gets fired?).
In my limited experience, smaller companies tend to over-think the Operating Agreement, and larger companies tend to under-think it. I think it's a good idea to make sure that your primary concerns are addressed in the document in a manner that is clear and understood by all the stakeholders.
And, as ^redacted noted, make sure to loop your tax advisor in on the financial aspects to say on the right side of our good friends at the IRS.
My primary advice is to make sure that your OA addresses the 3 most common areas where issue arise within closely-held businesses: 1) Money (who gets paid what and how is that decided? What happens if we need more capital?), 2) Power (who makes the decisions generally? How are votes allocated? When do we need majority/super-majority/unanimous consent on a business decision?) and 3) Succession Plans (what happens if an owner dies/declares bankruptcy/doesn't want to be an owner any more? How will the Company retain ownership with adequate flexibility to maintain daily operations of the Company? What if an owner/employee gets fired?).
In my limited experience, smaller companies tend to over-think the Operating Agreement, and larger companies tend to under-think it. I think it's a good idea to make sure that your primary concerns are addressed in the document in a manner that is clear and understood by all the stakeholders.
And, as ^redacted noted, make sure to loop your tax advisor in on the financial aspects to say on the right side of our good friends at the IRS.
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by an investor
5yrs ago
from Columbia University in Denver, CO, USA
from Columbia University in Denver, CO, USA
Here is a very simple operating agreement folks can look at for inspiration. Not a substitute for getting a deal lawyered.. LMK if you have any questions. redacted
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