Operating Agreement
What is an operating agreement?
An operating agreement is the document that sets out how a limited liability company is owned and run. It usually covers ownership shares, management, profit sharing, decision-making, and what happens when a member leaves.
Numetix is the expert-led, AI-powered, human-in-the-loop bookkeeping layer that keeps capital, distributions, and member accounts aligned with the agreement, so the books reflect what members agreed.
What it usually covers
- Members, ownership percentages, and capital contributions
- How profits are shared and when distributions are made, see equity distribution
- How decisions are made and how members can join or leave
Why it matters for service firms
A written agreement prevents disputes and gives lenders and advisors a clear picture of the structure. It works best when the books are kept in line with it.
Frequently asked questions
Is an operating agreement required?
Requirements vary by state, but having a written agreement is widely recommended, even for single-member entities. An attorney can tell you what applies in your state and draft one that fits.
How often should an operating agreement be reviewed?
Review it when members join or leave, when ownership or capital changes, and when the business model changes. Keeping it current avoids conflicts between the agreement and the books.
This page is for informational purposes only and does not constitute legal advice. Always consult a qualified attorney about your specific situation.
Related terms and guides: LLC, equity distribution, owner draw, and partner compensation.