A limited liability company’s operating agreement or company agreement is similar to a corporation’s shareholder agreement, and provides for the management of the LLC, and the rights and duties of the owners of the LLC (members) and the managers of the LLC, if any.

Specifically, the LLC operating agreement should address the company’s finances, capital contributions, percentages of ownership, voting rights, meetings, notices, buyouts, distribution of profits and losses, officers, and other matters. Limited liability companies generally may be managed by the members or by appointed or elected managers.

In New Jersey, the operating agreement is a foundational document for a Limited Liability Company (LLC). It outlines the internal governance structure, financial arrangements, and the roles and responsibilities of its members and managers. The New Jersey Revised Uniform Limited Liability Company Act (RULLCA), which governs LLCs in the state, provides flexibility for members to tailor the operating agreement to their specific needs, as long as it does not conflict with state law. The operating agreement typically includes details on capital contributions, ownership percentages, voting rights, procedures for meetings and notices, provisions for buyouts, and the distribution of profits and losses. It may also define the roles of officers and set forth the management structure, which can be member-managed or manager-managed. While New Jersey does not require an LLC to have an operating agreement, it is highly advisable to create one to ensure clear operations and to protect the members' limited liability status. Without an operating agreement, the default provisions of the RULLCA will apply to the LLC.