Date Name Address Dear _____________ : Congratulations on the formation of your new Limited Liability Company. At this point your company has been organized, you have received a file stamped copy of the articles of organization, a certificate from the state, operating agreement and my letter concerning your duties to the members of the Limited Liability Company. At this time, I want to expand upon those acts that you need to undertake so your company operates at full legal compliance. STRUCTURE. I have organized your Limited Liability Company so that it receives pass through taxation at the federal level. This means, as far as the Internal Revenue Service is concerned, your company will be taxed as a partnership. Accordingly, you may deduct the company expenses from your personal income tax return. In your operating agreement, I established provisions concerning capital accounts. The capital accounts provisions are those which divide among the members the percentage of the losses and who is to receive what percentage of income. These accounts must be kept current and I suggest that you meet with your accountant and ensure that proper records are established. If you are using an accountant be sure that your accountant is aware of what we have done and organizes the company books accordingly. If you are not using an accountant, please contact this office for additional information and advice concerning these matters. ORGANIZATION. it is important that you organize your company beyond the legal documents I have prepared. There must be a meeting of the members and at this meeting organizational duties should be divided among the group. I have provided in the articles and in the operating agreement general provisions on management. Now you need to place people into those slots. Additionally, checking accounts need to be opened and the other licensing steps necessary to your particular business to establish a functional company need to be taken. Again, if you have any problems or questions on what is required in this matter, please feel free to give my office a call. Pursuant to the operating agreement, resolutions approving each of the organizational steps should be written out and approved by the prerequisite number of people. SIGNING. In signing documents, whether contracts, purchase orders, checks or letters, it is very advisable that following your name you put the capacity in which you are signing the document. It is suggested that you should at the very least sign YOUR NAME, then the word "MEMBER," and then your COMPANY'S FULL NAME. This is important because you do not want to set yourself up to be individually liable for your acts. When you sign a contract simply in your own name, without indicating the capacity and company for which you have signed, you may find yourself personally liable for the performance of the contract. USE OF LLC NAME. As with signing documents, it is important that all company documents, logos, stationery, and correspondence correctly designate the use of the limited liability company name. I have specified the correct name requirements in the articles of organization. Please be advised that this designation and name should be used at all times. Existing names, if any, need to be changed to reflect the new and current name, along with checking accounts, imprinted checks, business cards and the like. RECORD KEEPING. Unfortunately, because we have designed you Limited Liability Company with a minimum amount of management red tape, many members believe that record keeping is not important. The opposite is true. It is very important that there be a central registry of records. I recommend strongly the use of minutes as if you were a corporation. In the minute book, which may be simple spiral notebook, you should record the signing of contracts, the purchases of property, the making of loans, the borrowing of money, salaries, hirings and firings. Background for each of the decisions that goes into the undertaking of the acts I have just described should be recorded along with the membership vote required by your operating agreement. While this may seem to be an onerous task, the discipline to keep records is an important one and often times will spell the difference between failure and success of a business. Lastly, the keeping of these records makes for interesting reading ten or fifteen years down the road as you watch the development of your company. NEXT OFFICE APPOINTMENT. This office will maintain an ongoing relationship with you and your company. As explained to you during the formation stage, my office represents the entity. It is important that you come into our office every six months so that you can update me on the actions of the company and what has been occurring. We can then discuss appropriate steps to protect you and your company's interests. Accordingly, I have instructed my secretary to set up an appointment for you on the ___________ [date] at _____ o'clock at my office. If this is not convenient or if you desire to terminate my relationship and representation, please notify my office immediately so that we can make this time available to another client. Appoximately one month before your appointment, a notice will be sent reminding you as to what records and information will need to be brought to the meeting. Sincerely, _______________________ Name