Starting a business is an exciting step, but many owners overlook a key document that protects both the business and its members: the operating agreement. Whether you are launching a large company or a small family business, an operating agreement provides structure, clarity, and legal protection.
Working with a business lawyer Massachusetts companies trust ensures your operating agreement is tailored to your needs and compliant with state law.
What Is an Operating Agreement?
An operating agreement is a legal document that outlines how your business will run. For LLCs in Massachusetts, it is not legally required, but it is highly recommended.
The agreement defines ownership percentages, management responsibilities, voting rights, profit distribution, and procedures for resolving disputes.
Why It Matters for Small Businesses
Even small LLCs benefit from an operating agreement. Without one, state default rules apply, and they may not reflect your intentions. For example, profits may be divided equally among members regardless of contributions.
An operating agreement can also protect your personal liability by reinforcing the separation between your business and your personal assets.
Common Issues Addressed in an Operating Agreement
- How profits and losses will be divided
- What happens if a member leaves or passes away
- How major business decisions are made
- The process for adding or removing members
- Steps for dissolving the business if needed
How a Business Lawyer Massachusetts Owners Can Help
A lawyer will ensure your agreement addresses your specific goals and complies with Massachusetts law. They can also update your agreement as your business grows or changes.
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An operating agreement is more than paperwork. It is a roadmap that protects your business and reduces the risk of future disputes. Whether you are starting your first LLC or expanding your company, working with a business lawyer Massachusetts entrepreneurs rely on ensuring you have the right foundation in place. Reach out to DaMore Law today!