LLC Agreement Checklist

by Practical Law Corporate & Securities

This Checklist compiles essential questions to consider when drafting a comprehensive limited liability company (LLC) agreement. It addresses initial considerations such as whether the LLC is single-member or multi-member and whether it will use a long or short-form agreement. The Checklist also explores member interests, including the presence of majority and minority interests. It delves into the roles of investors and key employees. Organizational matters covered include the LLC's name, formation date, registered agent, principal place of business, and the need for licenses. The Checklist further examines member considerations for admitting new members, liability limitations, and transaction permissions. It discusses the structure of LLC interests, including voting rights, allocation of profits and losses, and the issuance of profit interests. Management structures, whether member-managed or manager-managed, should also be considered, along with the powers, duties, and compensation of managers. LLC interests, such as capital contributions, capital accounts, and allocations and distributions are discussed. Finally, it considers tax treatment, record-keeping, dissolution procedures, restrictive provisions like non-compete clauses, and miscellaneous provisions like dispute resolution and amendment procedures. This Checklist should be used to identify critical aspects which are considered to create a robust and legally compliant LLC agreement.