What is an operating agreement?
An operating agreement is a legal document that outlines the operational and financial aspects of a business in Texas. It lays out the rules and regulations governing the business, including issues such as ownership, management, capital contributions, voting rights, profits and losses, and the dissolution of the business. An operating agreement is an important document as it helps to settle disputes by providing a clear understanding of how the business is run and what the responsibilities of each owner are. An operating agreement is not always legally required, but anyone entering a business as an owner would benefit from having one in place. It is particularly important for businesses formed as limited liability companies (LLCs) as it helps to protect the personal assets of the owners from the liabilities of the business. Having an operating agreement in place can also help to ensure the business is treated as a separate entity for legal and tax purposes.
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