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Limited liability companies need to get owners on the same page

On Behalf of | Jun 17, 2024 | Business Law |

When selecting a type of business formation, many businesses can benefit from a limited liability company, also referred to as an LLC. This combines aspects of a corporation and a partnership. With the LLC, the owners will have invested capital into the business. The amount they have put into the business generally dictates their influence.

For some LLCs, the owners oversee it on a day-to-day basis. In others, they install managers to do so. With this business entity, a key aspect in its operation is the meetings and how votes are conducted.

Meetings and votes are necessary for an LLC to operate efficiently. The law dictates how these issues are handled. When meetings are planned, the members of the LLC must be informed. Members are granted equal voting rights in how the business runs, therefore one will not have more influence than another. Majority generally rules in making decisions, so if there is a dispute, it is settled by a straight vote and the side that has the most votes will see their decisions put in effect.

Some LLCs function with a governing authority. In some cases, there are factors that are not part of the daily operation of the business. Perhaps an expansion is planned or there are financial challenges that need to be addressed with seeking loans. In general, the business runs independently without needing meetings about every minor issue. Major considerations are a different story.

Having legal guidance can smooth the process of operating a business

The more people there are involved in a business, the more complicated it can be. With an LLC in which large decisions need to be voted on while smaller decisions are left to the autonomy of others, it can be complex. For these and other business-related matters, guidance in business law can be extremely valuable.