Operating Agreements and Why Your Business Needs One!

Going into business with others can be tricky! Be proactive about maintaining your business and get an operating agreement to memorialize the terms of your relationship with your business partners.

What is an OA?

An operating agreement is a key document used by Limited Liability Corporations to outline business’ rules, regulations and provisions.  It contemplates how key decisions are made, who owns what percentage of the company and the details of the organization’s financial and functional decisions.

When should you get an OA drafted?

The best time to draft an operating agreement is at the beginning of the business relationship. This helps to mitigate risks to everyone because it ensures business partners are on the same page. If your business has already started and you don’t have an OA, don’t fret! It’s never too late to get on the same page with your team.

Why do you need an OA?

Operating Agreements are contracts between business partners. It’s important to memorialize the functions, financial and decision-making roles of each party. a business before there is a disagreement or decision that needs to be made. It’s important to be proactive about mitigating risk and not reactive. Conflict happens and sometimes no one sees it coming. Keep the peace and Get an operating agreement drafted while everyone still loves each other. Your lawyer will thank you!