One of the most common mistakes we see are do-it-yourself enterprise agreements and statutory agreements. What makes do-it-yourself errors more common is the appearance of online models that can be downloaded for free or purchased by companies like LegalZoom. These companies advertise with legal documents in a “One Size fits all” model, but the reality is that most companies are not the same because owners and management have different expectations about their roles and responsibilities. Many unnecessary heartaches and legal problems can be avoided by taking the time to carve and understand your corporate contract or status from the beginning. What happens, for example, in the event of a blocked vote? What happens if a majority shareholder becomes incapable of acting or, thank God, killed? If your spouse is married, will your spouse inherit a stake in the LLC or corporation? Would you like to work with a person`s spouse? All these issues, and more, can be resolved through enterprise agreements and statutes. An enterprise agreement is an agreement between members (owners) of a limited liability company. The Enterprise Agreement is a very important document that governs the operation of the LLC and protects you and other members of your LLC by describing the rights and obligations of each other and the LLC. It is, in its function, akin to a partnership agreement. The LLC Enterprise Agreement is NOT the document you submit when creating an LLC. An LLC`s notification document is referred to as status.
An important part of starting a small business is the submission of all documents in due form. While setting up the legal structure of your business and filling out forms can be painful and frightening, it is often part of the legal process prescribed by law. Two documents on which many small entrepreneurs are disoriented are enterprise agreements and statutes. Chances are you need a version of both documents for your business, so it`s important to understand each other`s purpose. The SBA describes an enterprise agreement for an LLC as a more personal protection with a less formal structure. The statutes offer a more formal protection structure and certain tax advantages. A limited liability company must be registered in the relevant jurisdiction. This will be achieved by preparing and submitting a document called “Statutes.” The statutes must comply with the court`s reporting obligations. All states have a blank copy of the statutes to download from the state`s website.
The operating contract is a separate document and an agreement between the owners of LLC. The enterprise agreement sets out the conditions under which owners will interact as members of the LLC. The operating contract is not subject to the competent court. As in the case of a business agreement for an LLC, a company`s statutes determine how the board governs a company. As a general rule, there are legal requirements that must be included in the statutory provisions, how the minimum and maximum number of directors can be convened at any time, or how shareholder meetings and special meetings can be convened (at Washington State, for example RCW 23B.02.060 establishes statutory requirements), but in addition to statutory provisions). , a company may contain many other guidelines for the management of the business. Again, depending on the complexity of the business, or if the company expects to have many shareholders, the statutes can be simple or extremely complex.