Use The 15 Month Rule To Review Your Operating Agreement

What was a good idea then may not be a good idea now. Take partnerships, for example. Many first timers go in 50/50 expecting both partners to be all in, all the time. It doesn’t always play out that way. Better said, it rarely plays out that way. Regardless of the circumstances, even if things are hunky doory, it is a good idea to revisit your operating agreement to make sure all partners have a clear understanding of what they committed to.

Visiting the agreement (or any document that should have a periodic review) annually is a good idea. Reviewing every fifteen months is better. Extending the review frequency by 3 additional months will force the review to happen at different times of the season. For example, if the document was created in January, the first fifteen month review would happen in April. The next review would be July. The next October. And then the next would start the cycle over again in January.

The different times of years may bring different emotions or personal responsibilities. Just ask a parent with a college student what the financial strains feel like in July. Or any taxpayer what April feels like. Since agreements are reviewed with biases toward current outside influences, changing things up can help. It surely breaks the pattern of considering the same things at the same time.


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