Seven Words that Scare Me
“Let me tell you what I did….”
Nothing scares me more than hearing this from a client. I know that’s not the case for all of my fellow attorneys. In fact, I’m sure that it’s a litigator’s favorite phrase. For me, a transactional guy, however, it usually means trouble. Let’s face it, some things are hard to undo.
Often, for me at least, the client has already signed an agreement which he or she then wants me to look at. Our options are limited at that point. Sure, I can take a look at the agreement and point out risks and other areas of concern. What I can’t do is do anything about it. Once the agreement is signed, it can only be changed if both parties agree. On top of that, new consideration is required for the amendment.
This comes up often in the context of limited liability companies (“LLCs”). LLCs can be great for small businesses that never intend to go public: they are easy to form; they can be easy to manage; and they require less in terms of corporate structure and formality than do corporations. On the other hand, the relative simplicity and ease of LLCs can lull people into a false sense of security. I’ve see a lot of – too many, really – LLCs with no LLC agreements or LLC agreements which are so generic and toothless (think about what you might be able to obtain from an online “one stop shop”) that they fail to account for the members’ specific needs and wants.
The good news, however, is that agreements can be amended. It’s not always easy, and there will need to be some give and take. Many times, though, the parties can find a way to agree to a set of changes that will work for everyone.
If you have an agreement that you think needs to be revisited, either because you signed it in haste or the circumstances have changed, please contact us so that we can help you assess your options.
This is the first in a series of posts intended to highlight common LLC mistakes, scenarios, and issues often faced by LLC members.