Pre-Organization Questionnaire Letter

I use a pre-organization questionnaire letter that is mailed or faxed to clients. The letter has questions about LLC organization and management and offers clients options concerning both (see Options and Choices). The letter raises business issues and discusses LLC organization strategy. Responses to the letter help me draft the LLC Operating Agreement.

Responding to the letter gets LLC owner/members thinking specifically about their business or investment in terms of an LLC. I give LLC owner/members the choice of even basic LLC provisions such as whether the LLC should be a “Term” LLC or an “at-will” LLC or whether it should be “Manager” Managed or Member Managed. I have my own theory on these issues and have always prevailed but I want clients to consider the choice for themselves so they better understand the workings of their LLC and LLCs in general.

The more clients think about the legal aspects of LLCs the better chance they will grasp the key concept that their LLCs are separate and distinct legal entities. If LLC owner/members understand that legal fact and act accordingly in the future, they will enhance rather than undermine their LLCs’ asset and liability protection.

The more I can get LLC owner/members thinking about their businesses or investments the greater the likelihood their expectations will be represented in the LLC Operating Agreement and the less likely (in a Multi-Member LLC) that there will be future conflicts among LLC owner/members.

My experience is that better results are obtained by asking questions in writing and letting clients answer at their leisure as opposed to asking questions in a face-to-face meeting or over the telephone. Half the purpose of the questionnaire letter is to get clients thinking about their businesses or investments in terms of LLC structure and organization. I hope they will have un-pressured time to answer. I have had clients decided not to go into business after considering the questionnaire which is clearly a better result then reaching that decision after the business is up and running.

The Pre-Organization Questionnaire Letter is tool for expanding the scope of the LLC Operating Agreement which in turn delivers extra value and protection to the client (see Options and Choices) and is not something I used when I organized “Form” LLCs.

“I don’t know as I want a lawyer to tell me what I cannot do. I hire him to tell me how to do what I want to do.” J. P. Morgan quoted in Ida M. Tarbell’s The Life of Elbert H. Gray at 81 (1925).