Legal Question in Business Law in California

Re: Operating Agreement

You need to be specific as to exactly what rights you wish to retain and what it expected from the partner as well as other issues. I could probably draft such an agreement for under $ 1K.

Re: Operating Agreement

Have a lawyer get into the complicated shareholder agreement, which need not be that complicated. Also, it isn't clear whether you have a corporation (which has shareholders but bylaws instead of an operating agreement) or an LLC (which has members and an operating agreement). If no lawyer was involved in the setting up of the entity, chances are it's not set up properly and that work should be done now as well to prevent future problems.

Re: Operating Agreement

An appropriate way of doing what you want is to have an agreement that specifies: the rights and duties of the new 'partner' as a shareholder and officer and director, the notice and basis for removing him, the manner of valuing the stock, etc. It should be done as a shareholders agreement and documented in the corporate records by proper vote and approval. Doing this 'on the back of an envelope' on the cheap is likely to cause a great deal of litigation expense in the future if removal and a disagreement arises. Feel free to contact me to discuss the costs of doing it right; they are not monumental.