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LLC Mini Course No. 5

The Heart of Your Asset Protection and Tax Opportunities – Forming an LLC Operating Agreement

Today I would like to cover the most important part of your LLC.  The Operating Agreement is the crux of your asset protection.

The Document You Get to Write in Forming an LLC

The Operating Agreement is the heart and soul of your LLC. So often I see people who have filed their articles of organization and totally ignored the operating agreement when forming an LLC. Or, they have a weak boilerplate, “one size fits all” operating agreement.

That’s bad!! You get to write what you want in your operating agreement. You can have real control over your taxes, your asset protection and your relationships.  It is OK to use your state’s boilerplate forms for your articles of organization, but not so with the operating agreement.

You must write your operating agreement so you have control.  You need to be able to get maximum tax benefits and double asset protection, plus easily operate your LLC.

In forming an LLC, if you write it down and it’s not illegal, the courts will usually honor your wishes. When you really think about that, you have a lot of power to dictate how your LLC operates, is taxed, and defends itself when it’s attacked.

For example, if your operating agreement says that the LLC has the power to remove a member that files for bankruptcy, the other members will be protected from any interference from the bankruptcy trustee.

If a member gets divorced, the operating agreement could specify that the payout is only book value rather than fair market value. The divorce court will have to live with it.

The operating agreement can dictate what happens to ownership of membership interests on the death of a member, thus avoiding probate and loss of control.

These are things you probably don’t have in your operating agreement. Read it and see.

Of course, if you’re just setting up your LLC, these are all issues you need to think about addressing – and there are dozens of other issues.

What Do I Do with My Operating Agreement?

You must file the articles of organization with the state, but your operating agreement is an “internal document.” It isn’t filed. It is “public,” however. So, you need to make it good.

What if you have an operating agreement you need to “fix?” Don’t worry.  It is OK! You can amend the LLC operating agreement. Your current operating agreement will tell you what you have to do to amend it. (Everything about operating your LLC should be laid out in the operating agreement.)

Even if a lawsuit has already been filed, you can amend your operating agreement. That’s just fine. But why wait? Let’s redo your operating agreement and beef up your protection!! It just looks better if you’re not doing your amendment on the courthouse steps going into the court when you are sued.

Wrapping Up

I hope you’ve learned a lot the last few days.

I can’t show you in these Mini Courses all the ins and outs of an LLC operating agreement.  It’s a document that should be unique to you.  In the LLC Wizard operating agreement course, I give you lots of alternative wording for different issues and let you choose how you want to address the issues.

Remember that your LLC operating agreement can only have TWO of the four elements of a corporation.   If you have more than two described in your operating agreement, the LLC is flawed, and you will lose your asset protection – that’s pretty much a given fact.

If you already have an LLC, maybe you’ve seen some weak spots in your LLC structure. Hopefully now you see that you can beef up an existing LLC and greatly improve your asset protection and money-making potential.

If you’re just setting up your LLC, let’s help you do it right.

You may be saying to yourself.  “I know what needs to be done, I am just not sure I can do it.”

I am here to tell you that you can do it.   If you feel like you need a little more help whether you are just starting your LLC or making sure your existing structure is in tip-top shape, consider my LLC Wizard.

The LLC Wizard comes with the opportunity to call me and ask questions about LLCs.  There is no charge when you call as one of my LLC Wizard “students.”  The question is always how long the call-in privileges last.  I say that it is a lifetime.  I have had the same phone number answered by a real person for the past 35 years.  There’s a catch though–it’s my lifetime, not yours.

The truth is that a proper business foundation really does affect your business success.   In my business I often see small businesspeople when it is too late to help them.  Don’t let this happen.  I really do want to help you make your business succeed.

LegaLees’ LLC Wizard is 7 hours of audio instructions and  220 pages of supporting documents that cover the following concepts in depth:

1.  How to determine which state you want to form your business in and what you need to do to make the filings. It includes

    • Business Structure Questionnaire
    • Business Entity Matrix
    • Complete step-by-step filing instructions with each state’s website information

2.  The best way to get the right name.

    • Name Availability Instructions
    • tip

3.  Getting the Maximum Tax Opportunities.

    • How to file the tax election step by step
    • Audio discussion of tax “loopholes”
    • Step-by-step instructions for applicable tax forms

4.  The fundamental characteristics of an LLC

    • Articles of Organization tips
    • State specific paperwork

5.  The heart of Your LLC – the Operating Agreement:

    • Operating Agreement
    • Double asset protection clauses
    • Tax clauses

By taking the time to go beyond getting a wad of papers from an attorney or off the internet, you will get better asset protection and make more money.  I will help your little company put an extra $5,000 or $10,000 into your pocket every year. By preparing today, I will also help you survive the disaster when it comes. It usually isn’t only a matter of “if it comes” but “when it comes”!!

Why do some businesses become successful and others fail?  The owners in successful businesses do things right.  They control taxes and survive the tax audit because they know the laws and use them to their advantage.

It’s not difficult, but they are lucky if they get a little help in advance. Maybe Dad had a successful business and taught them, or they’ve been lucky and had an advisor that did more than just take their money. Somehow, they have learned how to use the legal tools that help businesses succeed. I can help you and your business succeed!

Once you get your hands on my training, your luck may well change.  I’ll take the time to walk you through the setup and operation of your company (big or small) and show you what the laws can do for you.

Just take a look at what a student had to say about my training materials:

“Until listening to your courses, I thought I was safe.  But, I have now seen that there were many items I was not doing correctly.  Thank you for putting together your program.  This is one of the best investments I have made in a long time.  I, like most middle class Americans, thought business structuring was for the wealthy big companies.   Lucky I found this out from you and not during a lawsuit. Thanks again.”  Mark G., Cassville, GA

Try the course now for a full 30 days, and return it for a full refund if you are not 100% satisfied. If you’re not happy, I’m not happy.

What have you got to lose?

Click the link below.  Enter “Wizard35” (without quotes) and you will receive a 35% discount.  I want to help you succeed.  Call 801-802-9020 if you have questions.  We’re happy to help.

Get the LLC Wizard Today!