Many businesses are LLCs that are owned by a single person. Single-member LLCs offer a lot of operational benefits to their owners, but what happens when the business dies?

Unless the business owner is proactive and makes sure that the LLC's operating agreement provides for the inevitable death of the business owner, big problems can arise upon the owner's death.

For example, who will make business decisions on behalf of the company? And who will succeed to the economic interest of the deceased owner?

Making provisions for the business succession and ownership of the LLC in the owner's will is prudent and to be expected. But, business owners should not neglect to make sure that appropriate provisions are in place in the LLC's operating agreement as well.

This video discusses the important step of providing for business succession--governance of the LLC and economic rights in the LLC--in the LLC's principal document, its operating agreement. This highlights another reason why even single-member LLCs should have an operating agreement.

свернуть