If ever there was an era for the all-around Do-It-Yourself entrepreneur, this must be it. Any bit of information seems available to anyone willing and able to do some research via Google. By now, this practice has already engrained itself in the realm of legal services, which, for better or worse, has created wonderful new opportunities in addition to a fair share of unwelcome problems.
Today’s budding or seasoned entrepreneur can fulfill many needs for legal documents and pointers online at minimal cost. Our firm certainly values what access to these resources has accomplished. People are better educated on setting expectations and keeping costs down on ministerial tasks. Unfortunately, this empowerment can often prove too enticing to the intrepid ones* amongst us, and it is bound to create some issues downstream.
One such example that keeps recurring is the case of the limited liability company (“LLC”) with an ill-fitting Operating Agreement. A member will come to us seeking help when they want to add a member, remove a member, their liability shield is challenged, or perhaps they’ve found a lender or financier who is seeking more thorough documentation. What we generally find is that the Operating Agreement is contradictory, doesn’t allow for the required action without some significant procedural hoops, or is simply silent on the matter. At the least, this can result in a significant amount of expense to remedy, and at the worst may result in a nullification of the act or an opportunity for a third party to “pierce the corporate veil” and reach into the pockets of the member – the very eventuality the entrepreneur was seeking to avoid. And these are just a small sample of the situations we encounter where the right customization at the forefront would have saved company money, preserved member relationships, and limited personal liabilities, at the back-end.
Of course, the irony of all of this is that the more success an LLC realizes, the longer it survives, and the inevitability of these situations becomes all that more real.
And therein lies the rub. How serious are you about succeeding in your new venture?
Again, we understand the appeal of forming an LLC independently–it is cheap at the outset and going it alone seems to be commonplace these days given the pages upon pages of unique resources that share pointers on the formative process.
Pay careful attention, however, to the language you see when shopping around online for this advice. More often than not, these resources will focus on the two major steps in the life of the company that typically require unanimous consent: the formation and the dissolution. Frankly, it’s because that is the extent to which these resources can serve anyone without some degree of interaction. But do you really know what those terms and phrases mean? Are you aware of what that document actually does for the company? How it affects your day-to-day operations?
Rarely does an online service or competitor’s advice spare a thought on where one’s specific goals intersect with devices like LLCs. Remember, the objective isn’t to successfully form an LLC, the objective is to make a success out of the LLC that you’ve formed. Hence, we don’t just use these tools to simply match the formula, we make the formula match your goals.
That starts with taking care to assess the demands that may arise so you can maximize benefits as your venture encounters issues associated with interpersonal relationships, expansion, employees, taxes, governance, maintenance, distributions, procedures, industry rules and regulations, industry customs, rules and regulations on raising capital, etc. These are the concerns of a thriving LLC that should be taken seriously from the beginning, which is exactly why we operate our firm in that manner.
Indeed, the space in which we’ve found ourselves as practitioners is to encourage you, the informed entrepreneur, and to augment your vision with a service that empowers success. Give us a call or send us an email and let’s talk about it.
*Let’s be honest, if you weren’t one of the intrepid ones, you probably would not be making the leap into entrepreneurship.