Today I want to talk about your LLC and specifically your LLC agreement. What if your LLC agreement doesn’t fit your circumstances? A lot of times companies find that when they go back and revisit their LLC agreement, it doesn’t fit their circumstances. Maybe it was a form agreement that was downloaded off the internet early in the history of the company. Maybe that company has evolved and changed – the ownership’s changed. The valuation mechanisms in the LLC have changed. Maybe the company’s become more valuable, or creative.
A lot of times people will use a very simple LLC agreement early in the company’s life and then move to something more sophisticated later. So for a lot of reasons companies find that LLC agreement they have existing, (or maybe they didn’t even sign one), doesn’t fit the needs of the company. What do you do? Well typically, you can amend your LLC agreement.
Your state statute, whichever state that you’re formed in, plus your LLC agreement will typically govern the terms of how you can amend your LLC agreement. So you can start over. Time to go visit your lawyer. Talk about where you are, where you want to be, and what you want to do, and you can amend it. So it’s very simple.
Now it gets a little more complex if you have investors involved. A lot of times those investors negotiate for rights to allow you not to amend the agreement, so you’re going to then have to involve the investors in the conversation. But regardless of where you are, typically there is a path forward. It can be done.
Bring some experience into your team. Get it working together and move a path forward. If your LLC agreement doesn’t fit where you are, you don’t have to give your company up, you don’t have to start over, and you’re not stuck with it forever. It’s time to reinvent. Think about where you want to be. Go through an amendment process.
A good, experienced lawyer can help lead you through it and come out the other end with an agreement you love. Really not that hard. Just going to take some time and some effort. So revisit your LLC agreement. Find out if it fits. If it doesn’t fit go talk to somebody and get that process moving forward. You know, these aren’t easy things to talk about. I really appreciate you taking the time to think about it. These are not things that everybody’s doing. It’s what’s going to make your company even better than the others. Thank you for taking the time and investing yourself and believing in it.
This posting is intended to be a tool to familiarize readers with some of the issues discussed herein. This is not meant to be a comprehensive discussion and additional details should be discussed with your attorneys, accountants, consultants, bankers and other business planners who can provide advice for your circumstances. This article should not be treated as legal advice to any person or entity. Each case is unique. Past results do not guarantee future outcomes. Freeimages.com/photographer sanja gjenero.
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