Operating Agreements

An operating agreement is a written agreement that explains the roles and responsibilities of members and managers (if any) of a limited liability company (LLC). The operating agreement also addresses other rules that govern the business operation.

Owners of LLCs that do not follow procedures may be personally liable for the actions of the company. Through the operating agreement, the LLC can establish processes and procedures to distinguish the company from its owners.

Even if an LLC has only one member, an operating agreement can formalize the LLC and make it clear that the member is not personally liable for the debts of the business.