Operating Agreements and Formation Documents

Generic formation documents work until something unexpected happens: an owner wants out, a new investor wants in, or the owners disagree about where the business is going.

Well-drafted governing documents answer those questions in advance. In Texas, an LLC's operating agreement is called a company agreement, and we draft company agreements, partnership agreements, shareholder agreements and corporate bylaws.

Attorney

Andrew KussmaulPartner

Agreements We Draft

Company Agreements

For LLCs, covering how the company is managed, how profits and losses are allocated and distributed, how decisions are made, member contributions, voting rights and buyout procedures.

Partnership Agreements

Each partner's role, capital contributions, profit sharing, decision-making authority and exit terms.

Shareholder Agreements

For corporations, covering share transfers, rights of first refusal, buy-sell terms, voting arrangements and protections for minority owners.

Bylaws and Initial Consents

The corporation's operating rules and the first actions of its board and owners.

Questions Every Agreement Should Answer

Ownership and Management

Who owns what percentage, and who has authority to bind the company.

Exit and Buy-sell Terms

How an interest is transferred or bought out after a death, disability, departure or sale.

Disagreements

How deadlocks and disputes are handled before anyone files a lawsuit.

Future Investment

How new owners or investors come in without upsetting the balance among the existing owners.

Frequently Asked Questions

Have a question that isn't answered here? Call us at (817) 631-8842 or send a message.

Ask a Question

What is the difference between an operating agreement and a company agreement?

They are the same document. Texas law calls an LLC's governing agreement a company agreement, while most other states call it an operating agreement.

What is a buy-sell provision?

A buy-sell provision sets what happens to an owner's interest when that owner dies, becomes disabled, leaves the company or wants to sell. It usually covers who can buy the interest, how the price is set and how it is paid. Without one, the remaining owners can end up in business with a former owner's heirs.

Can we change our agreement later?

Yes. Most agreements explain how they can be amended, usually by a vote or written consent of the owners. Bringing in a new owner, raising money or changing how the business is managed are common reasons to update.

Does a corporation need a shareholder agreement if it already has bylaws?

Bylaws cover how the corporation operates, such as meetings, officers and voting procedures. A shareholder agreement covers the relationship among the owners, including transfer restrictions, buy-sell terms and rights of first refusal. Closely held corporations usually benefit from both. See our article Does Your Company Need a Shareholder Agreement?

More in Startups, Entity Formation, and Venture Capital

All practice areas