By Hayden Baugh


The early stages of organizing a new start-up can be a very exciting and overwhelming time for business owners. One of the most important considerations for a business owner during this time is how to internally structure the business. For limited liability companies (LLCs), an operating agreement is a set of rules and regulations that govern the internal operations of the LLC, dictating everything from the roles and responsibilities of members to the decision-making process and profit distribution.

An operating agreement provides clarity by clearly defining the rights, duties, and obligations of each member within the LLC. This clarity helps prevent misunderstandings and conflicts, ensuring that the members are on the same page regarding their roles and responsibilities. In addition to outlining each member’s role in the company, a well-drafted operating agreement outlines the procedures for dispute resolution, member buyouts, and how to handle unexpected events such as the death or incapacitation of a member. Allotting time to plan out and execute a thorough operating agreement can go a long way to protecting the LLC and the members’ interests.

Additionally, a good operating agreement provides a tailor-fit management structure to meet the business’s and its members’ specific needs. Every LLC has its own unique goals, values, and dynamics, and the operating agreement should accurately reflect those unique qualities. Also, an operating agreement can be tailored to allow the members to customize everything from voting rights to profit-sharing arrangements. This flexibility ensures that the LLC’s governance structure aligns with its long-term vision and objectives.

Jackson Law’s Transactional Department is ready to provide experienced guidance and support for you and your business. Please reach out to the Transactional Department Managing Attorney, Hayden Baugh, at to set up a complimentary consultation to discuss your specific business needs.

With this knowledge, now you can Rest Easy.