An LLC operating agreement is the internal rulebook for a limited liability company. It can explain who owns what, how decisions are made, how money moves, and what happens if a member leaves or a disagreement stalls the business.
Core provisions to consider
- Ownership percentages and initial contributions.
- Member-managed or manager-managed authority.
- Voting thresholds for ordinary and major decisions.
- Profit distributions, tax allocations, and recordkeeping duties.
- Buyout, transfer, deadlock, and dissolution procedures.
Even when state law does not require a detailed agreement, relying only on default rules can create surprises. A written agreement gives members a shared reference point before emotions and money are on the line.