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There are many reasons why a new entrepreneur would choose to form an LLC or Limited Liability Company to run their business. It provides benefits for new or smaller scale businesses. Most of the time a Limited Liability Company serves to give the business a structure that will maximize profits and reduce operating costs. A very vital reason to form an LLC is for the protection it provides for the owners of a company.


One thing you should never neglect when you are planning to form an LLC is the Limited Liability Company operating agreement. Although not all state require a company operating agreement it would still be prudent to have one drafted. It is still important to have a company operating agreement even if you are the sole proprietor of your company.


Why should there be a Limited Liability Company operating agreement?


It protects your limited liability status for legal purposes. If you are the sole owner of the LLC, without the company operating agreement the courts will view your business as a sole proprietorship. The agreement is needed to give credibility to the LLC.