Even if no business agreement is required in your state, running your business without a business agreement could jeopardize your LLC status. Key use: Enterprise agreements and statutes define both the ownership of the company and the structure of the company. One way to act as a real business is to have the same type of documentation that other owners of limited liability companies have. An LLC with more than one owner (called “members”) has a document called an enterprise agreement, which is prepared with the help of a lawyer when the transaction begins. A business agreement is a document that describes LLC`s activities and defines agreements between members (owners) of the company. All LLCs with two or more members should have an enterprise agreement. This document is not necessary for an LLC, but it is in any case a good idea. As noted above, an enterprise agreement describes THE activities of LLC that list the creation of the business and the procedures applied to the transaction. The agreement also specifies how LLC funds are allocated and distributed to the owner. This discussion is useful for the owner and a good way to ensure that proper records of procedures are kept. So if you want someone in particular (like someone who knows the company and has worked there for a long time) to take control of your LLC if something serious happens to you (like someone who knows the business and has worked there for a long time), you have to indicate it in your corporate contract.
If you don`t, you may have a situation in which you become unable to act and your 2-year-old daughter is expected to take over the business and manage it. In order to obtain and limit your personal liability, in the event that the company is involved in litigation, the courts have found more favourable a single LLC member who formalized the transaction by executing an enterprise agreement and acted accordingly. Therefore, the LLC deserves liability protection granted to it through state law. Therefore, this could affect, affect and even jeopardize your responsible liability protection.