BUILD-A-BROKER: HANDS ON PRACTICAL ADVICE BUILD-A-BROKER
Embracing The Ties That Bind Why you need an operating agreement: 8 operating agreement tips BY BRETT FARMILOE | SPECIAL TO NATIONAL MORTGAGE PROFESSIONAL
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perating agreements are pivotal in outlining a business’ financial and functional decisions. It’s the guiding document that bonds and legally protects business partners. Nonetheless, up-and-coming mortgage pros opening a brokerage with partners often neglect it. Learn why these eight business owners and entrepreneurs stress the importance of operating agreements and tips to help you complete yours.
ESTABLISHES STRUCTURE If you are the proud owner of an LLC, then you need an LLC operating agreement! An operating agreement establishes your company’s structure, helps protect your limited liability status, and creates the governing rules of your business. The only tip I have for writing an operating agreement is not forgetting to have your co-owners and lawyer sign it to make it official and legal. After that, you are set! -Vicky Franko, Insura
OUTLINE EVERYONE’S POWERS AND RESPONSIBILITIES If you have formed a limited liability company, otherwise known as an LLC, you must have an operating agreement. This document can help protect you
from personal liability and save you lots of stress down the road if anything goes awry with internal affairs down the road. When crafting an operating agreement, my tip is to really spend some time outlining everyone’s powers and responsibilities. The less you leave to the imagination, the better. -Blake Murphey, American Pipeline Solutions
BECAUSE LAWYERS SAY SO Whenever an attorney or CPA gets on my case for something, I listen and do it. I respect their expertise and experiences. If they’ve seen business owners like me get burnt for things like not having an operating agreement in place or posting labor law posters, I make sure that our posters are displayed, and an agreement is in place. Even if you are the sole owner of a business, avoid future lawyer freak out moments by getting an operating agreement in place. -Brett Farmiloe, Markitors
PLAN FOR AN UNEXPECTED EXIT You and your business partner are most likely in the honeymoon phase and don’t think it is a good use of your limited funds to invest in legal counsel to document how one or both of you can make your exit. However,
you would be wrong. It is much easier to set up a win-win exit strategy in advance than after emotions are high and people feel burned by their former best friend and business partner. Until business partners fully understand the importance and have the tools to negotiate expectations, business divorces will continue to occur at high rates. Worse, the business’s value diminishes significantly because of the distractions caused by these unproductive transitions and transactions. -Katharine Halpin, The Halpin Companies Inc.
HIRE A PROFESSIONAL An operating agreement defines what duties members are responsible for as it pertains to the business and is also a blueprint of what happens to the company in the event of divorce, death, and dissolution. I believe it is vital to hire an attorney to prepare an operating agreement when a business gets started. A professional will ask the questions you may not think about, and it is best to hammer out the details with all involved before any issues arise, so decisions are made with a clear head and without emotion. -Kimberly Bogues, Flourish Business Services, LLC
PEOPLE ON THE MOVE //
Nations Lending hired Randy Koerner as the company’s divisional sales manager.
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| NATIONAL MORTGAGE PROFESSIONAL MAGAZINE
Sprout Mortgage hired Henry Santos as the company’s executive vice president and chief information officer.
American Homeowner Preservation Inc., promoted Tim Gillis as the company’s chief revenue officer.
Bhavesh Patel was named director of client management for Chase Correspondent Lending located in Houston, Texas.
