What is an Operating Agreement?

Answer:
An operating agreement is an agreement among

the members of a Limited Liability company (LLC). Formal verbal or written operating agreements are not required for LLCs in many states, but they are recommended.

Written agreements can serve the important purpose of preventing and managing disputes among members.

All members of the LLC must agree to the terms of the initial operating agreement. Written operating agreements generally specify whether or not majority or unanimous votes are required for implement changes to the terms of the agreement. It is also advisable to include a clause stating that the terms of the operating agreement must be in writing.


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