When drafting an operating agreement for a limited liability company or a partnership agreement consideration needs to be given to how you want to structure the need for additional capital from the members or partners in the future. As an Atlanta business litigation attorney, I have seen a number of operating agreements and partnership agreements that lack any comment regarding a procedure for the raising of additional capital much less what is to happen if and when one or more members or partners fail and refuse to make a required capital call.
If not addressed until the need for more capital arises, often times the company is stuck trying to raise additional capital. This is because most operating and partnership agreements required unanimous consent of all members or partners to amend the agreement. Thus, it is vital to have both a mechanism for raising additional capital if necessary and then provisions for what happens if and when one or more members or partners fail to make the required call. Typically, agreements will have provisions for a pro rata reduction of one’s membership or partnership interest for the failure to make a required contribution.
If you are in need of a experienced business lawyer in Atlanta, Ga or elsewhere in Georgia to review your options in drafting the appropriate corporate formation documents or need advice from a corporate lawyer regarding how to raise additional capital in light of already drafted corporate documents, our lawyers are available to help. Contact us today at (470) 336-5562 or visit our website for additional information at www.businesslawyerinatlanta.com