What is an Operating Agreement?

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What is an Operating Agreement?
2009.05.03

The limited liability company's operating agreement is an important document. It describes how the owners, called members, govern and administer the limited liability company. Furthermore, many attorneys tell clients that an operating agreement increases legal liability protection because the document further separates the identity of the limited liability company from the identities of the LLC's owners. Finally, in some cases, outside parties like your bank may request that you provide a copy of your operating agreement before they'll do business with you.