Operating Agreement

The operating agreement is a contract among the members of an LLC and the LLC governing the membership, management, operation and distribution of income of the company.  Although it is not required in many states to draft an operating agreement, it is advisable. It is much like corporate by-laws or partnership agreements.

What to Include in Your Operating Agreement

There's a host of issues you must cover in your LLC operating agreement, some of which will depend on your business's particular situation and needs. Most operating agreements include the following:

-  the members' percentage interests in the LLC

-  the members' rights and responsibilities

-  the members' voting powers

-  how profits and losses will be allocated

-  how the LLC will be managed

-  rules for holding meetings and taking votes, and

-  buyout, or buy-sell, provisions, which establish a framework for what happens -  when a member wants to sell his or her interest, dies, or becomes disabled.

You can approach establishing an Operating Agreement in one of two ways.  You can utilize the free samples and edit it for your situation or you can use the paid services below.