Business Operating Agreements

An Operating Agreement is a crucial document for Limited Liability Companies (LLCs), outlining the business’s financial and functional decisions, including rules, regulations, and provisions. This agreement is designed to govern the internal operations of the business in a way that meets the specific needs of its owners. Once signed by all LLC members, it serves as a legally binding contract.

Why Do You Need an Operating Agreement?

Having an Operating Agreement is essential for several reasons:

• Protects Limited Liability Status – Ensures that LLC members maintain protection from personal liability. Without this agreement, an LLC may resemble a sole proprietorship or partnership, putting personal assets at risk.
• Clarifies Verbal Agreements – Even if members have agreed on terms verbally, misunderstandings can occur. A written agreement prevents miscommunication and provides a legal reference in case of disputes.
• Ensures Compliance with State Laws – Many states require LLCs to have an Operating Agreement to confirm their legitimacy. Without one, the LLC may be subject to state default rules, which may not align with the owners’ intended business operations.

Key Elements of an Operating Agreement

Our Operating Agreement service includes:

1. Ownership Structure & Member Roles – Defines the percentage of ownership and responsibilities of each member.
2. Profit & Loss Distribution – Specifies how profits and losses will be shared among members.
3. Voting & Decision-Making Rules – Outlines voting rights and decision-making processes for major business actions.
4. Management Structure – Determines whether the LLC is member-managed or manager-managed.
5. Dissolution Terms – Establishes procedures for dissolving the LLC if needed.

Simplify Your LLC Formation with a Custom Operating Agreement

Ensure legal protection, avoid conflicts, and operate your business with confidence. We help create a customized, legally sound Operating Agreement tailored to your LLC’s specific needs.