Drafting an Operating Agreement

[Marc Pfleger]

The title agency is asking for my operating agreement for my multi-member llc to check if I have signing authority. I have been educating myself on the OA for a few weeks and was going to take my time to draft an OA and then meet with an attorney and or CPA to review/revise. But time has become an issue. Can anyone recommend a good CPA or attorney in the Tampa Bay Area? The LLC is set up with myself and my father as managing mbr's. I find the deals, hire the contractors, marketing etc..., he supplies the money out of a HELOC. He lives in NJ. Or can I provide a generic OA that states I have signing authority to satisfy the title co. then change the OA later to be more comprehensive?

Thank you.

[Marc Ramsay]

I'm currently on my 4th revision of the OA that I use for my LLC's in Ohio. It's currently 28 pages long and was written by 1 lawyer for about $500, and has been subsequently reviewed and updated by some rather pricey attorneys working for various JV partners since then.

It is very important to have a comprehensive OA, to protect yourself, and your partners, not only against the risks of lawsuits (the usual asset protection), but also against unforeseen issues arising from partnership issues, divorce, death, insanity, and a host of other issues. Your OA also specifies how your LLC will be taxed, as well as how you or your partners can sell off your share, or buy out your partner. An improperly written and maintained OA (yes, there are annual meetings and other paperwork that needs to be done) can be set aside by a judge in a lawsuit and your LLC demoted to a Partnership. Oops, what happened to the asset protection now?

If anyone would like a copy of my current Ohio LLC OA, drop me a message with your email address and I'll send you a sanitized version of it. I have one caveat though; you must have your own lawyer review it before using it to ensure it is right for your situration and coveres everything your need it to.