Top LLC operating agreement FAQs answered.

Learn more about LLC operating agreements, why your LLC needs one, and more.

Even though not every state requires LLCs to have operating agreements, it’s a good idea to have one anyway. Take a moment to learn more by reviewing the LLC operating agreement FAQs below.

The definition of an operating agreement.

Operating agreements are legal documents that outline your LLC’s financial and decision-making structure. Even if it's not a state requirement, it's best to have one on hand — particularly if you’re part of a multi-member LLC.

What does one include?

Operating agreements should include the name of your LLC, its formation date, and the principal place of business. The document should also name each LLC member, their ownership percentage, and their mailing address.

An operating agreement for LLC may also contain information about the company’s registered agent, compensation, dissolution, and more.

Why do businesses have them?

If an LLC has more than one member, the document serves as a contract between all parties. It outlines how much of the LLC each person owns and that person’s key responsibilities.

If there is a conflict, an operating agreement prevents misunderstandings between founding members. Operating agreements also outline the LLC's specific rules and regulations that the state may not otherwise specify.

And even if you’re the only member of your LLC, operating agreements help further secure your protection against personal liability.

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