##What is an operating agreement?

An operating agreement is a legal document that outlines the financial rules, responsibilities of founders, how disputes are resolved, and even more of a limited liability corporation (LLC). Other business formations, like corporations, have articles of incorporation and corporate bylaws, which are similar to operating agreements but not the same. Basically, they’re the way you and your cofounders will outline everything you need to know and do in order to successfully run your startup.

While only California, Delaware, Maine, Missouri, and New York actually require that an LLC has an operating agreement, we very, very highly recommend drafting one, regardless of where you’re located. If you decide not to h...