This is a sample Operating Agreement. An operating agreement is a key document used by LLCs because it outlines the business' financial and functional decisions including rules, regulations and provisions. The purpose of the document is to govern the internal operations of the business in a way that suits the specific needs of the business owners. Once the document is signed by the members of the limited liability company, it acts as an official contract binding them to its terms.
Without one, your LLC might be governed by default state rules, which may not suit your business. It’s like trying to play a game without knowing the rules; you could run into trouble!
Think of your operating agreement as a living document; it’s a good idea to review and update it whenever there are big changes in the business, like adding a new partner.
Most banks will ask for an operating agreement to open a business account, as it shows you’re serious and organized about your business.
Absolutely! You can draft your own agreement. Just make sure it covers all the key points, and it’s wise to have a legal expert give it a once-over.
Your operating agreement should cover the basics like ownership percentages, management structure, and how profits will be shared, kind of like the ground rules for a game.
While it's not a law, having an operating agreement is like having insurance; it could save you a lot of headaches down the road by clearly stating each member's rights and responsibilities.
An operating agreement is like a playbook for a business. It lays out how the business will run and the roles of its members.