"I have seen several cases where the judge set an LLC aside in less than fifteen minutes. While this greatly upset the owners, it was clearly the failure of the owners to pay attention to their LLCs and their proper structure and maintenance."
Orem, UT (PRWEB) March 08, 2013
Lawsuits can be devastating to a business. This is why the way an LLC Operating Agreement is defined can greatly affect the degree of liability protection the company will get. The articles of organization may form the basis of the company; however it is the operating agreement that is the regulating document. What that agreement says will very often determine the outcome, either favorably or unfavorably, of any lawsuit.
The purpose of the LLC is to provide liability protection to the owner or owners of the business. The problem is that not adhering to formalities, poor business structure and insufficient documentation can leave openings that destroy liability protection. The owner or owners may think they are protected when, in fact, their assets can be reached by the company's creditors.
Mr. Phillips relates this point. "I have seen several cases where the judge set an LLC aside in less than fifteen minutes. While this greatly upset the owners, it was clearly the failure of the owners to pay attention to their LLCs and their proper structure and maintenance."
The way the LLC is set up makes a big difference in how a judge will regard a case. The problem is that if the definitions are not in the operating agreement, the judge can literally create those terms in court. Mr. Phillips further stated, "It's very easy to ignore the operating agreement when filing the articles of organization. If the operating agreement isn’t written by the company owners and all of the terms aren’t set out, the courts basically have the power to define the LLC as they see fit."
While the best defense is a well designed operating agreement, structuring that agreement correctly is often difficult for small business owners. They simply don't understand the complexities involved.
Mr. Phillips’operating agreement template provides a detailed description of options available to structure an operating agreement that will provide the best possible asset protection.
His LLC Operating Agreement Template is downloadable online. A customizable version is also available with nearly two hour audio course to assist people in making the best possible tax and asset protection choices for their specific situations. It is in standard Word Document format for easy customization. The Complete LLC Operating Agreement is usable again and again.
Mr. Phillips is an attorney and Counselor of the U.S. Supreme Court. Mr. Phillips holds three degrees, a BS, an MS and JD. He has been licensed in mortgage brokering, real estate, life insurance and securities. He is a nationally recognized figure in business structuring, financial planning, asset protection and estate planning. He also founded the LegaLees Corporation, which is a unique company that specializes in resolving tax and asset protection difficulties for people with large net worth.