Vision of the Future
Creating an Operating Agreement
Once you decide what type of business entity to build, the next step is to define on paper how you want to run it by creating an Operating Agreement. According to the US Small Business Administration (SBA), default state rules will govern LLC’s that don’t create their own official Operating Agreement. To avoid being caught in a statutory quagmire, businesses create operating agreements that specify personal liability protections and define member rules, regulations, and provisions as to how to run their business. These documents act as official binding contracts, providing recourse based on member consensus in case of future conflicts.
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