When drafting multi-member limited liability company operating agreements, clients tend to focus on the crucial elements to getting the company up and running—notably, how much of the company does each member own, and who has the power to control the company. While those factors are without a doubt important, determining what occurs when there is a transfer of ownership (and the associated restrictions on transfer) are crucial elements that are often overlooked.

Clients will often brush this off with the rationale that all the current members “are friends,” or a change of ownership/control is, in their minds, so far in the future that it is something that can be dealt with at that point in time.