Jul 292015

LLC General Requirements and Recommendations

(This is Part 5 of our LLC Series) The following are some general requirements and recommendations you should consider when operating an LLC:

SIGNING ON BEHALF OF THE LLC

Whenever the LLC managers or officers are signing agreements, documents, or correspondence on behalf of the LLC, care should be taken to include the LLC’s name in the signature block and to indicate the title of the manager or officer signing. An example of an appropriate signature block is included below:

SAMPLE COMPANY, LLC

By: _________________________

Name: John Smith

Title: General Manager

Failure to do so may lead, in the context of litigation involving a signed document, to including the person who signed the documents in the lawsuit in his or her individual capacity.

OPERATING AGREEMENT

It is important to remember that the operating agreement and articles of organization of the LLC are the authoritative source of advice as to how to do certain things that will come up from time to time. For certain types of LLCs (normally those with a larger number of members), a form of operating agreement similar to the type of bylaws applicable to a corporation may be advisable or useful.

OFFICIAL DOCUMENTS

A number of small LLCs have found it useful to designate one of the officers, usually the secretary, to be the recipient of all “official” correspondence concerning the LLC and its relationships with the various government agencies with which it deals. This helps to avoid forgetting to submit certain of the regularly filed forms, such as the Annual Form LLC-12 (Statement of Information), which though simple documents can lead to troublesome problems if they are not taken care of promptly.

FINANCES

An important feature of post-formation LLC operation is to keep the LLC’s money separate from the personal funds of members, managers, or employees. Failure to keep these separate is a common problem with closely held or newly formed LLCs. Such a co-mingling of funds is often seized upon by LLC creditors and other persons suing an LLC as a reason to disregard the LLC entity and impose liability on the individual members for the LLC’s debts, obligations, and liabilities.

I hope you found this article to be helpful. Please feel free to forward it to anyone you believe would benefit from the information. Stay tuned for our final article of our LLC series, Post Formation Matters.

Have additional questions? Contact us at 800-634-5260.

My best,
Joe

The information provided herein is not intended as legal advice and should not be acted upon. If you have additional questions about this subject matter or would like to consult with an attorney about this or related subject matters, please contact Josef Cowan at the Cowan Law Group (800) 634-5260 or jcowan@cowanlawgroup.com.

Filed by Joe Cowan, July 29, 2015