What is an Operating Agreement?

An operating agreement is a key document used by LLCs because it outlines the business’ financial and functional decisions including rules, regulations and provisions.

The purpose of the document is to govern the internal operations of the business in a way that suits the specific needs of the business owner(s).

Once the document is signed by the member(s) of the limited liability company, it acts as an official contract binding them to its terms. An operating agreement is similar in function to corporate by-laws, or analogous to a partnership agreement in multi-member LLCs.


Miguel H., Snyder Lance - Richmond, VA

One of the IBO’s told me that IDA was what we needed. The insurance and paperwork can be overwhelming, but working with the IDA made it quick and easy. And it was done right.

LLC formation for Independent Route Owners

Your LLC Protects Your Business and Your Family

In single-member LLCs, an operating agreement is a declaration of the structure that the member has chosen for the company and sometimes used to prove in court that the LLC structure is separate from that of the individual owner and thus necessary so that the owner has documentation to prove that he or she is indeed separate from the entity itself.

Many brand contracts now require a designee to be named as part of the operating agreement which would allow the brand to turn to this named individual in the event of the member’s death or inability to make decisions regarding the disposition of the route.

Rev. Jim J., Snyder Lance - York, SC

IDA meets all of our needs as IBOs. They have a plan in place to help you. Setting us up can be a lot of legwork, but they have all their ducks in a row.