Limited liability companies (LLCs) typically use several key agreements to govern their operations and protect the interests of the owners, also known as members. Here are some of the most common and essential agreements for an LLC:
Operating Agreement: An LLC’s operating agreement is a legal document that outlines the company’s structure, management, and ownership. The operating agreement specifies the rights and responsibilities of the members, the percentage of ownership each member holds, and the manner in which profits and losses are allocated.
Buy-Sell Agreement: A buy-sell agreement is a contract between the members of an LLC that governs the transfer of ownership interests in the event of a member’s death, disability, or retirement. The agreement outlines the terms and conditions for transferring ownership, including the price and method of payment.
Membership Interest Purchase Agreement: A membership interest purchase agreement is a contract between an LLC and a prospective member that outlines the terms and conditions for the purchase and sale of a membership interest in the company.
Non-Compete Agreement: A non-compete agreement is a contract between an LLC and one of its members that restricts the member from competing with the company for a specified period of time after the member leaves the company.
Confidentiality Agreement: A confidentiality agreement is a contract between an LLC and its members, employees, or contractors that restricts the dissemination of confidential information. The agreement protects the company’s proprietary information and trade secrets.
These are some of the most common and essential agreements for an LLC. However, the specific agreements required for an LLC may vary depending on the nature of the business and the jurisdiction in which the LLC is formed.
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