Are operating agreements mandatory for limited liability companies?
No. In Ohio, operating agreements (i.e. documents that set forth the company’s ownership and management structure) are not required by state law. Nevertheless, operating agreements are always advisable and will likely be needed to take care of ancillary business items, such as opening a business bank account. Operating agreements are especially needed when there is more than one member/owner—the agreement will set forth various roles, duties, and responsibilities, and can limit disagreements or even resolve them when they occur. So even though operating agreements are not required by law, every limited liability company should have one.
Can I trademark my business name?
It depends. Names, words, logos, images, sounds, and even colors can all become trademarks, but they must first meet certain requirements. If they fail to meet those requirements, they are not trademarks and will not obtain trademark protection (e.g., the ability to sue for infringement). If your business name is distinctive and draws a connection in the consumer’s mind between the goods or services provided with your business name, then perhaps your name is a trademark. But this is a very fact-specific analysis, so speak with a professional before investing money in trademarking.
What happens to my business interest when I die?
The default rule is that business interests generally become a part of the owner’s estate when the owner dies. The interest—just like ownership of any other personal property—goes into the deceased owner’s estate and must be handled according to the deceased owner’s will or state law. The interest should then transfer to the deceased owner’s heirs. However, certain arrangements or documentation may circumvent this default rule and direct otherwise. For example: an operating agreement can require the deceased owner’s interest be transferred to another owner; a buy-sell agreement may require the company to purchase the deceased owner’s interest once they die; a transfer-on-death designation on a deceased owner’s ownership certificate may automatically transfer the interest to a named beneficiary; a trust may direct the interest to be transferred to a named beneficiary. There are myriad things that can happen to your business interest when you pass away; be sure to discuss your concerns with a professional who can recommend how this is best handled for your business and your estate.
Do I need a will or other estate planning documents?
Yes. Plain and simple. Especially if you own a business, you need a proper estate plan set up, which should include (at a minimum) a last will and testament, advance directives (healthcare power of attorney and/or living will), and a durable general power of attorney. An estate plan is a very cheap insurance policy that will not only give you peace of mind, but help your family in the event of your untimely passing.
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