Operating Agreements can also serve to show third parties that you, another owner or employee of your LLC has authority to sell property or enter contracts for the LLC. In some cases, such as a sale of real estate, the buyer or Title Company may require your LLC to produce an Operating Agreement as a condition of the sale or issuance of an insurance policy.
Finally, your Operating Agreement can dictate the procedure for the admission of new owners or the purchase of a departing owner’s interest. This allows you as an owner to control who you become partners with if another owner leaves the business.
If your business is in the form of an LLC, you should be sure to have an Operating Agreement drafted to protect your rights and so your business is prepared for purchases and sales of property.