If you`re interested in forming a limited liability company (LLC) in the state of Delaware, you`ll need to create an operating agreement. This document details the company`s management structure, ownership percentages, and other important information. It`s a crucial part of the LLC formation process, and it`s required by law in Delaware.
One important aspect of the operating agreement is the section that deals with securities. Specifically, the operating agreement should include language that outlines the company`s authorized securities and the rights of the holders of those securities. This section should also provide information on how securities can be issued or transferred.
The Securities and Exchange Commission (SEC) regulates the sale and transfer of securities in the United States. While LLCs are typically not subject to the same regulations as publicly traded companies, it`s still important to ensure that your operating agreement is in compliance with SEC rules.
Here are a few key things to keep in mind when drafting the securities section of your Delaware LLC operating agreement:
– Authorized securities: In the operating agreement, you should specify the types of securities that the company is authorized to issue, such as membership interests or units. You should also specify the total number of each type of security that can be issued.
– Transfer restrictions: The operating agreement should include provisions that restrict the transfer of securities, if desired. For example, you might require that any transfer of membership interests must be approved by a majority vote of the other members.
– Rights of holders: The operating agreement should specify the rights of the holders of each type of security. For example, membership interests might entitle holders to a share of the company`s profits, while units might confer voting rights.
– Securities offering: If you plan to offer securities to investors, you`ll need to comply with SEC regulations. This might involve creating an offering memorandum or prospectus, filing Form D with the SEC, and providing certain disclosures to investors.
Overall, the securities section of your Delaware LLC operating agreement is an important piece of the puzzle when it comes to forming and managing your company. By working with an experienced attorney and ensuring compliance with SEC regulations, you can create an operating agreement that meets the needs of your business and protects your interests as an owner.