Glossary · People and paperwork
Operating Agreement
In short
A legal document for an LLC that outlines the members' rights, responsibilities, and how the business is managed. As a buyer, you need to review this to understand governance and profit distribution.
What it means in a deal
For an LLC acquisition, the Operating Agreement dictates ownership percentages, voting rights, and how decisions are made. Ensure it aligns with your understanding of the deal, especially regarding any seller financing or post-closing roles. It also governs buy-sell provisions.
Related terms
Common questions about Operating Agreement
- How does an operating agreement impact an SBA partner buyout loan?
- How does the SBA determine affiliation for businesses operating under a license agreement?
- What duration of post-acquisition operating expenses can working capital typically cover?
- Are there any minimum requirements for how long my business has been operating?
- Does my business need to be operating for a certain time before applying?
- What if the business I'm acquiring is a startup with limited operating history?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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