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What is an operating agreement?

The operating agreement is akin to a partnership agreement for a General Partnership or Limited Liability Partnership (LLP). It is an internal contract amongst the members/owners of the LLC, and it lays out such things as ownership interest, member responsibilities, accounting method, adding or removing members, terms for concluding the LLC, etc. It is generally not required by a given state for forming an LLC, although it is certainly recommended. When dealing with private companies for financing issues (loans, mortgages, etc.) it may be required by that company.