If I started a LLC with 2 other partners and we have transitioned into an S corp, can I use an operating agreement or should we draft a bylaw?

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If I started a LLC with 2 other partners and we have transitioned into an S corp, can I use an operating agreement or should we draft a bylaw?

One of the partners has agreed to step down as a silent partner verbally. We want to draft an agreement for the terms.

Asked on January 16, 2012 under Business Law, Arizona

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

You have formed an entirely new type of entity whose requirements under the law are different.  It would be prudent of you to prepare and execute new agreements that reflect the change to the status.  Additionally, you have stated that terms have changed and the players as well.  Verbally is no good.  Needs to be in writing.  Good luck.


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