Kiritsis & Associates
By John Kiritsis, Esq., CPA, MBA, MS, JD, LL.M
Kiritsis Law Group
212 922 0005
It is especially dangerous for multi-member limited liability companies (LLCs) to operate without adopting a written operating agreement for several reasons:
Uncertainty about ownership and management: The absence of a written operating agreement can result in uncertainty about ownership and management structure, which can cause disputes among the members.
Lack of clarity in decision-making: An operating agreement outlines the decision-making process and voting rights of the members. Without a written agreement, members may have different interpretations of how decisions should be made and disputes may arise.
Unclear distribution of profits and losses: An operating agreement spells out the distribution of profits and losses among the members. Without a written agreement, members may have different expectations about how the company's profits and losses will be distributed.
Difficulty in transferring ownership: An operating agreement outlines the process for transferring ownership and exiting the company. Without a written agreement, it may be difficult for members to sell their ownership interest or transfer it to others.
Legal and tax implications: An operating agreement can help ensure that the LLC is compliant with state law and tax regulations. Operating without a written agreement may result in unintended legal and tax consequences.
In conclusion, having a written operating agreement is critical for multi-member LLCs as it helps avoid disputes and confusion, and ensures that the company is operating in a manner that is in compliance with state law and tax regulations.
New York Business Corporation Law
New York Limited Liability Company
New York General Obligations Law
NYS Office of Professions
Whether you are a new business startup or a well-established company, our law firm can help you with all of your business law legal needs. For a free consultation, you can call us at 212 922 0005.
Law Offices of Kiritsis & Associates
Phone # 212 922 0005
Manhattan Office (Main Office):
633 Third Avenue
New York, NY 10017
Brooklyn Office (By Appointment Only):
1023 74th Street
Brooklyn, NY 11228
New Jersey Office:
7309 Ventnor Avenue
Ventnor, NJ 08406
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