If you’re considering adding a business partner to your company, or you’ve already got a partner and want to make sure everyone is held accountable, it’s important to have the right documents in place to put the legal weight behind owners’ and managers’ responsibilities.
The best way to legally document these responsibilities is through contracts and operating agreements (or bylaws, depending on your business structure), to set the rules of operations in stone so everybody knows how to function within the day-to-day business.
Operating Agreements and Corporate Bylaws
Operating agreements apply to limited liability companies, and corporate bylaws apply to corporations. These documents serve the same function, which is to provide the rules of the road within your business.
These documents deal with things like voting procedures, manager authority and limitations, and so much more. Essentially, these legal documents give the business structure a bit more clarity and protect your expectations.
These documents also create a fiduciary duty in owners to act for the best interests of the company. So once you have those requirements, job descriptions, and rights and limitations down, operators need to act accordingly to carry out the best interests of the company. And if they don’t, those documents also have procedures for removing those members or managers.
Learn More About Legal Documents for Your Business
If you are considering expanding your business with a new business partner, make sure you do it right with Daniel Ross & Associates. To schedule a free consultation, please call (216) 307-5590, or get in touch using our online intake form.
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