Operating Agreement

Definition of "Operating Agreement"
  1. A contract signed by owners of a limited liability company outlining their financial obligations and rights, ownership percentages and profit shares, meeting procedures, and process for dealing with departing members
How to use "Operating Agreement" in a sentence
  1. Though not required by the state, it's advised for any LLC to have an Operating Agreement.
  2. The Operating Agreement clearly outlined the procedure for determining the share of profits between members.
  3. The dissolution process of the LLC was guided by the clauses in the Operating Agreement.

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