what is an LLC's Operating Agreement, and where can I get one?
An Operating Agreement is critical to the planning, development, and operation of a Limited Liability Company. It should directly reflect the business plan and correctly frame the relationships, rights, duties, and authorities of the members and officers.
As it should reflect the business plan, there should be a business plan. So if you are going to create an LLC, start at the beginning and make a business plan. A business plan does not need to be much more than an improved outline of what you want to do and how you plan to get there. The process of writing it down is very helpful and may highlight problem areas for you before you experience the problem.
Here are some links to sites which can assist you in preparing a business plan:
Small Business Administration
FamilyEducation.com
bplans.com
Remember, it is the process of developing the business plan that may be as helpful as the finished product itself. Don't skip this planning process by blindly incorporating someone else's sample form, or you will have missed the point. You may find it helpful to consult with a professional during this planning phase.
Once you have your Business Plan, then we start with the drafting of your Operating Agreement. The LLC's Operating Agreement is akin to a mix between a corporation's by-laws, and a partnership agreement. The assistance of an attorney may be helpful to you at this stage to frame the concepts that you have developed in your Business Plan in the context of the formal drafting of the Operating Agreement. Forms are useful to the extent that they remind us of topics that should be addressed, but they are dangerous in that they can be misused to drive the drafting process instead of being driven by it. They are doubly dangerous because they tend to encourage people to skip the planning phase, and just "fill in the blanks". With every business endeavor, planning is critical. And anything that interferes with or prevents planning is to be viewed as an obstacle, not a help. As my Granny used to say... "an ounce of prevention is worth a pound of cure".
[October, 11, 2002, 3:19pm -- Larry, another resource for putting together a business plan that I like very much is from the Online Business course at MyOwnBusiness.com. I like it so much, that I'm adding it here as an addendum to your post rather than as a comment, so that people interested in this topic can also visit over there. I think it approaches everything from a very practical perspective, which makes it worth looking at. The quizzes it includes aren't really necessary, but the insights the course provides are really good. -- Bill]
Friday, October 11, 2002
Thursday, October 10, 2002
home alone
Here's a quiz question for you...In Delaware, at what age may you let your child be alone?
Well, it is unlawful to "abandon" a child of less than 16 years of age. In this context, "abandon" means to leave a child unattended with the intention not to return (ever). (11 Del.C. 1101.)
But if you don't intend for it to be permanent, by the letter of the law you can't leave a child without supervision until they reach 18. This is a very vague section (11 Del.C. 1102.), especially with respect to this issue. In fact, it doesn't specifically talk about it at all.
In practice, there may be an informal policy by the Division of Family Services not to suggest prosecution when children are age 12 and above, except in unusual circumstances. This is a policy, however, and not available to the public, according to a helpline social worker I spoke with. Her supervisor on the other hand, offered to mail me their new policy manual when it gets revised in a few weeks.
Meanwhile, at the link above, I found that DFS has its policy manuals online. This particular policy is at page 14 of the User Manual. Don't you just love it when our government workers refuse to permit us to see a policy that effects us? Here, the policy had already been posted on the internet. I wonder if the refusal had more to do with ignorance and laziness than actual reason. I am referring here to the intial contact worker, not to the supervisor. The supervisor was appropriate and helpful. Shouldn't the line worker be that way?
What does it mean to leave a child alone? Just what it says: you can't leave a child unsupervised in your car or home while you run into the store; you can't leave a child unsupervised if you have to leave for work before they have left for school; you can't leave a child unsupervised to walk to school or wait at the bus stop; you just cannot leave a child alone period.
I suspect in this county alone that there are tens of thousands of children, every school day, who are left alone at bus stops or walk to school alone. Technically, I think this is a violation of the law on the part of the parents, guardians (or whomever has undertaken the responsibility to care for that child). Should the police arrest those tens of thousands of parents each day?
If not, where is the rule or law that we can look to so as to be able to determine what is legal and what is not legal? (I take as a given for the purpose of this limited discussion that we as parents will make our parental but not legal analysis based upon our parental judgment. And so here I am only referring to the legal analysis.)
Should we rely upon a policy of DFS? Should that policy be posted in the open at schools and other public places? Have we delegated the law making authority to the employees of a State Agency that has a huge turnover rate? Or any State Agency?
This ambiguity troubles me greatly.
I found this helpful article online. While it covers these topics using Maryland law, the general discussion is pretty good.
Here's a quiz question for you...In Delaware, at what age may you let your child be alone?
Well, it is unlawful to "abandon" a child of less than 16 years of age. In this context, "abandon" means to leave a child unattended with the intention not to return (ever). (11 Del.C. 1101.)
But if you don't intend for it to be permanent, by the letter of the law you can't leave a child without supervision until they reach 18. This is a very vague section (11 Del.C. 1102.), especially with respect to this issue. In fact, it doesn't specifically talk about it at all.
In practice, there may be an informal policy by the Division of Family Services not to suggest prosecution when children are age 12 and above, except in unusual circumstances. This is a policy, however, and not available to the public, according to a helpline social worker I spoke with. Her supervisor on the other hand, offered to mail me their new policy manual when it gets revised in a few weeks.
Meanwhile, at the link above, I found that DFS has its policy manuals online. This particular policy is at page 14 of the User Manual. Don't you just love it when our government workers refuse to permit us to see a policy that effects us? Here, the policy had already been posted on the internet. I wonder if the refusal had more to do with ignorance and laziness than actual reason. I am referring here to the intial contact worker, not to the supervisor. The supervisor was appropriate and helpful. Shouldn't the line worker be that way?
What does it mean to leave a child alone? Just what it says: you can't leave a child unsupervised in your car or home while you run into the store; you can't leave a child unsupervised if you have to leave for work before they have left for school; you can't leave a child unsupervised to walk to school or wait at the bus stop; you just cannot leave a child alone period.
I suspect in this county alone that there are tens of thousands of children, every school day, who are left alone at bus stops or walk to school alone. Technically, I think this is a violation of the law on the part of the parents, guardians (or whomever has undertaken the responsibility to care for that child). Should the police arrest those tens of thousands of parents each day?
If not, where is the rule or law that we can look to so as to be able to determine what is legal and what is not legal? (I take as a given for the purpose of this limited discussion that we as parents will make our parental but not legal analysis based upon our parental judgment. And so here I am only referring to the legal analysis.)
Should we rely upon a policy of DFS? Should that policy be posted in the open at schools and other public places? Have we delegated the law making authority to the employees of a State Agency that has a huge turnover rate? Or any State Agency?
This ambiguity troubles me greatly.
I found this helpful article online. While it covers these topics using Maryland law, the general discussion is pretty good.
Wednesday, October 09, 2002
law school at a distance
Can distance learning and law mix? Would you take a chance attending an online law school when the American Bar Association refuses to accredit the school? How will law firms react when a student from a virtual school applies for a position as an associate?
The South Florida Business Journal's article Virtual law school challenges norm reports that a third of Concord Law School's first graduating class will be taking the California bar exam this February. The school is based in Boca Raton, but its students and professors live all over the country. Their biggest hurdle appears to be getting American Bar Association accreditation, but it will be interesting to see how many of their students pass the California bar. The school presently has 1,100 students.
Can distance learning and law mix? Would you take a chance attending an online law school when the American Bar Association refuses to accredit the school? How will law firms react when a student from a virtual school applies for a position as an associate?
The South Florida Business Journal's article Virtual law school challenges norm reports that a third of Concord Law School's first graduating class will be taking the California bar exam this February. The school is based in Boca Raton, but its students and professors live all over the country. Their biggest hurdle appears to be getting American Bar Association accreditation, but it will be interesting to see how many of their students pass the California bar. The school presently has 1,100 students.
commerce online
I'm looking forward seeing what shape Stanford's Center for E-Commerce will eventually take. I like the idea of a law school looking at online business in depth, and working towards helping people to consider the legal aspects of electronic commerce. A news.com article, Stanford puts Net policies to the test, describes the focus of the school's efforts:
If they need a model for what could be done, one approach that they might want to consider is the Wharton School's Knowledge @ Wharton.
I'm looking forward seeing what shape Stanford's Center for E-Commerce will eventually take. I like the idea of a law school looking at online business in depth, and working towards helping people to consider the legal aspects of electronic commerce. A news.com article, Stanford puts Net policies to the test, describes the focus of the school's efforts:
The new Center for E-Commerce, announced Tuesday, will be an interdisciplinary project that will try to help lawyers, business people and the general public shape policy and grapple with legal questions presented by the Internet. The center will host conferences and speaking engagements where people can hash out issues including Internet jurisdiction, intellectual property and the legal fallout of the dot-com bust.I hope that they extend the reach of their program beyond hosting local events by building an web-based repository of articles and information.
If they need a model for what could be done, one approach that they might want to consider is the Wharton School's Knowledge @ Wharton.
disney everlasting
Imagine if you could stop the hands of time, and capture the moment, hang on it, and reap whatever riches it brings.
A couple of years back, a copyright extension act was passed by Congress. Some people who were hoping to benefit from the entry of books, music, and film into the public domain were denied that opportunity because the act added another 20 years to works protected under copyright. When those artistic endeavors were created some 70 or so years ago, there was no expectation that copyright would still be in effect and royalties would still be rolling in come the twenty-first century.
We value freedom of expression in the United States. But, we also believe in giving people an incentive to create, and in rewarding them for their artistic expressions. When you render it down to simple terms, copyright is a way of limiting expression by giving people who have created something new an opportunity to benefit from that expression. Our founding fathers limited that monopoly over expressions. People would profit from their works, and then the expressions and ideas would enter into the public domain where others could use those creations to make something new. Or, at least, that was the idea.
An argument today before the Supreme Court in the case of Eldred v. Ashcroft challenged the latest act to extend copyright which benefits companies like Disney. If the challenge is successful, the movie makers would lose some of their oldest creations to the public domain. The greatest irony, perhaps, is that Disney's most loved accomplishments were movies based upon older tales from the public domain, such as Cinderella, Snow White and the Little Mermaid.
The studio has a new movie coming out this Friday. I read a New York Times review (reg. req'd) yesterday, and a passage from that article made me think of Disney's efforts to cling so tightly to the past:
Imagine if you could stop the hands of time, and capture the moment, hang on it, and reap whatever riches it brings.
A couple of years back, a copyright extension act was passed by Congress. Some people who were hoping to benefit from the entry of books, music, and film into the public domain were denied that opportunity because the act added another 20 years to works protected under copyright. When those artistic endeavors were created some 70 or so years ago, there was no expectation that copyright would still be in effect and royalties would still be rolling in come the twenty-first century.
We value freedom of expression in the United States. But, we also believe in giving people an incentive to create, and in rewarding them for their artistic expressions. When you render it down to simple terms, copyright is a way of limiting expression by giving people who have created something new an opportunity to benefit from that expression. Our founding fathers limited that monopoly over expressions. People would profit from their works, and then the expressions and ideas would enter into the public domain where others could use those creations to make something new. Or, at least, that was the idea.
An argument today before the Supreme Court in the case of Eldred v. Ashcroft challenged the latest act to extend copyright which benefits companies like Disney. If the challenge is successful, the movie makers would lose some of their oldest creations to the public domain. The greatest irony, perhaps, is that Disney's most loved accomplishments were movies based upon older tales from the public domain, such as Cinderella, Snow White and the Little Mermaid.
The studio has a new movie coming out this Friday. I read a New York Times review (reg. req'd) yesterday, and a passage from that article made me think of Disney's efforts to cling so tightly to the past:
In some ways, it's the most obvious, evergreen story line around, the stuff of daydreams from Ponce de León onward. What sets "Tuck Everlasting" apart from the usual fairy-tale fantasy of immortality, however, is its dark, cautionary note about the dangers of interrupting nature's progression. "I was happy that in this seeming children's book, there was this lurking terror, not of death but of undeath," Mr. Hurt said in a telephone interview. "Most people think of life as the story of life and death. Death is a bookend. If you take that bookend away, what have you got?"The original idea behind copyright is a good one. Provide incentives for people to create. Give them an chance to earn some money and credit for their expressions. And then, allow those ideas to enter into society were they can be used by other people to create something new. Endlessly extending copyright protection interrupts that progression of expressions, and keeps them from being the inspiration for new works.
Tuesday, October 08, 2002
administrative agencies and privacy impact statements
A new House bill (pdf) introduced and passed by voice vote on Monday, might make federal agencies more sensitive to privacy concerns. The Federal Agency Protection of Privacy Act requires that agencies perform two different assessments of the impact on privacy of proposed rules.
The first would be published as an initial impact statement:
A new House bill (pdf) introduced and passed by voice vote on Monday, might make federal agencies more sensitive to privacy concerns. The Federal Agency Protection of Privacy Act requires that agencies perform two different assessments of the impact on privacy of proposed rules.
The first would be published as an initial impact statement:
Whenever an agency is required by section 553 of this title [Title 5, United States Code], or any other law, to publish a general notice of proposed rulemaking for any proposed rule, or publishes a notice of proposed rulemaking for an interpretative rule involving the internal revenue laws of the United States, the agency shall prepare and make available for public comment an initial privacy impact analysis. Such analysis shall describe the impact of the proposed rule on the privacy of individuals. The initial privacy impact analysis or a summary shall be signed by the senior agency official with primary responsibility for privacy policy and be published in the Federal Register at the time of the publication of a general notice of proposed rulemaking for the rule.This initial statement should contain the following:
(A) A description and assessment of the extent to which the proposed rule will impact the privacy interests of individuals, including the extent to which the proposed ruleThe bill also calls for a final privacy impact analysis:(B) A description of any significant alternatives to the proposed rule which accomplish the stated objectives of applicable statutes and which minimize any significant privacy impact of the proposed rule on individuals.
- (i) provides notice of the collection of personally identifiable information, and specifies what personally identifiable information is to be collected and how it is to be collected, maintained, used, and disclosed;
- (ii) allows access to such information by the person to whom the personally identifiable information pertains and provides an opportunity to correct inaccuracies;
- (iii) prevents such information, which is collected for one purpose, from being used for another purpose; and
- (iv) provides security for such information.
Whenever an agency promulgates a final rule under section 553 of this title [Title 5, United States Code], after being required by that section or any other law to publish a general notice of proposed rulemaking, or promulgates a final interpretative rule involving the internal revenue laws of the United States, the agency shall prepare a final privacy impact analysis, signed by the senior agency official with primary responsibility for privacy policy.Like the initial privacy anaylsis statement, a list of contents was also defined by the bill for the final statement, which should contain:
(A) A description and assessment of the extent to which the final rule will impact the privacy interests of individuals, including the extent to which the proposed ruleThis seems like a really good idea on paper. There's speculation that the Senate will follow suit, and introduce a version of this bill "at the end of the congressional session when other non-controversial bills are considered." I can't want to see the first initial impact statement on a regulation that does affect privacy.(B) A summary of the significant issues raised by the public comments in response to the initial privacy impact analysis, a summary of the assessment of the agency of such issues, and a statement of any changes made in the proposed rule as a result of such issues.
- (i) provides notice of the collection of personally identifiable information, and specifies what personally identifiable information is to be collected and how it is to be collected, maintained, used, and disclosed;
- (ii) allows access to such information by the person to whom the personally identifiable information pertains and provides an opportunity to correct inaccuracies;
- (iii) prevents such information, which is collected for one purpose, from being used for another purpose; and
- (iv) provides security for such information.
(C) A description of the steps the agency has taken to minimize the significant privacy impact on individuals consistent with the stated objectives of applicable statutes, including a statement of the factual, policy, and legal reasons for selecting the alternative adopted in the final rule and why each one of the other significant alternatives to the rule considered by the agency which affect the privacy interests of individuals was rejected.
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