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  • Writer's pictureCarrie R. McNair

What is a Company Agreement and Why Should You Have One?

Trust me, you need a personalized Company Agreement for your Limited Liability Company (“LLC”), and here is why.

If you Google, “how to open an LLC,” you are led to numerous articles that make it sound like opening an LLC is an easy process. Articles on the subject provide a vague list of tasks that seem simple in nature: Select a State, Pick a Name, Choose a Registered Agent, File with the chosen State, Determine your Management Structure, Create a Company Agreement, get an EIN, file to do business in other states. Simple, right? Not really.

A Company Agreement is an agreement, written or oral, between the members of the LLC concerning the affairs or conduct of the business of the LLC. § 101.001, Tex. Stat. An LLC’s Company Agreement covers the relations among members, managers, and officers of the company, assignees of membership interests in the company, the company itself, and other internal affairs of the Company. § 101.052(a), Tex. Stat. To the extent that an LLC’s Company Agreement does not specifically provide for a scenario, Texas Statutes applicable to an LLC will govern the internal affairs of the LLC. Additionally, the Courts will hold an LLC to the terms of its Company Agreement. As such, your Company Agreement should be drafted by a professional.

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