Operating Agreements

While only some states require an operating agreement, we provide one for every entity we form because it lays the foundation for how your business will operate—and protects you from the unexpected.

Whether you're running a solo venture or have multiple members involved, an operating agreement clarifies ownership, roles, and how decisions are made. Starting with one in place shows you’re serious—and ensures you're covered from day one.

These are the key reasons we include one with every LLC or Corporation we form:

1. Safeguards the limited liability status of your business.
2. Formalizes verbal agreements you may have with partners or other equity holders in the business.
3. Gives legal weight to the way you want your business to run. Without it, your state’s default rules apply—which may not protect your interests.

An operating agreement outlines your LLC’s internal structure and specifies the roles of members and managers. It includes key details, from responsibilities and compensation to taxes and dissolution procedures.

LLC Attorney includes a standard operating agreement with every formation. In the event that you have a multi-member LLC (meaning multiple owners), you may choose a customized operating agreement.

An operating agreement typically reflects the rules for managing the LLC, such as:

• Who owns the company and each member’s percentage of ownership
• The roles and responsibilities of each member of the LLC, including who manages the day-to-day operations
• Who can act on behalf of the company and what decisions need approval
• How key decisions are made and who gets a vote
• What happens if the business closes or a partner leaves or a new one joins
• How profits are distributed among the members

If you don’t have an operating agreement, it can be difficult to prove who owns the company or how it’s meant to operate, which can create problems down the road.

Let’s say you start an LLC with a business partner but don’t create an operating agreement. Later, your partner wants to leave the business—and they believe they’re entitled to half the company’s profits and decision-making power, even though you were the one who put in all the initial capital and do all the day-to-day work.

Without an operating agreement in place, there's no way to legally prove that. In that case, your state’s default LLC laws determine what happens. In many states, that means profits and voting power are split equally among members—regardless of what you may have intended.

With an operating agreement, you can outline exactly how profits are shared, how decisions are made, and what happens if a member leaves. It replaces the state’s default rules with terms that actually reflect your business arrangement—giving you clarity, protection, and peace of mind.