Vertalis Business Law Glossary
Ownership & Governance
Operating Agreement
Also called: Company Agreement · LLC Agreement.
By Tim Nichols
Modern Counsel for Growing Companies
In plain English
An operating agreement defines how an LLC is owned and operated. It sets the rules for management, voting, contributions, distributions, ownership transfers, and what happens when an owner leaves.
In Texas, it is called a company agreement. It works alongside the certificate of formation and applicable law.