Operating Agreement Attorney in Tennessee

An operating agreement governs how the LLC actually runs: who decides what, how money flows, how members are admitted or removed, and what happens when one member exits, dies, or wants out. The document only earns its fee if it matches the way the business operates in practice.

Drafting addresses capital contributions and capital accounts, profit and loss allocation, voting and consent thresholds, manager authority, transfer restrictions, drag-along and tag-along rights, deadlock procedures, and buy-sell mechanics.

Multi-member LLCs that closed their formation with a generic template and need a real document before a partner change. Single-member LLCs whose lender or accountant has asked for one. Real-estate investment LLCs combining several owners across multiple properties.

Most online operating agreements miss the items that matter when the business is actually under stress: capital-call mechanics, valuation method for a forced buyout, what happens on a member's divorce or death, and how disputes are resolved without dragging the company into court.

Generic operating agreements look fine at signing and fail when the business is actually under stress. The five provisions worth getting right are: (1) capital-call mechanics, including what happens when a member cannot or will not contribute additional capital — dilution, default, forced sale, or interest-bearing loan; (2) the valuation method for a forced or voluntary buyout, with a concrete formula or process rather than vague 'fair market value' language; (3) what happens on a member's death, divorce, disability, or bankruptcy, including buyout obligations and timing; (4) deadlock procedures for major decisions, including mediation, buy-sell triggers, or judicial-dissolution thresholds; and (5) transfer restrictions that prevent a member from selling their interest to a third party without the other members' consent.

Skipping or genericizing any of these is the most expensive choice owners make. The cost of careful drafting now is a fraction of the cost of litigating ambiguity later.

Operating agreement work begins with capital — what each member contributes (cash, property, services), how those contributions are valued, and how the resulting capital accounts are tracked over time. Capital accounts matter because most distribution and liquidation provisions reference them.

An LLC that distributes pro rata to ownership percentages is the simplest case; LLCs with preferred returns, waterfalls, or different economic and voting interests need careful drafting. The agreement should also address whether and how members can withdraw capital during the LLC's life — most agreements restrict this to prevent members from undermining the business by pulling funds at the wrong time.

The buy-sell mechanics are the most-litigated piece of operating agreements when they come into play. Trigger events typically include death, disability, divorce, voluntary withdrawal, termination of employment (for owner-employees), and bankruptcy. The agreement should specify which of those events creates a buyout right, who has the right to buy (the LLC, the other members, or a designated successor), and how the buyout is valued and paid.

A common drafting failure is requiring 'fair market value' without specifying a valuation method — that often means an expensive appraisal fight when a buyout is triggered. Better drafting fixes a formula (multiple of EBITDA, book value plus a multiplier, or annually-updated agreed value) so the math is decided upfront rather than at the moment of conflict.

First call covers the business model, ownership economics, and exit expectations. A draft typically goes back within one to two weeks; revisions follow once members have read and aligned. Flat-fee or capped pricing available for straightforward agreements.

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