Operating Agreement: The Foundation of a Legitimate and Fundable Business
An Operating Agreement is one of the most important yet overlooked documents in the life of an LLC. Whether you’re starting a single-member business or partnering with others, having this agreement in place is crucial—not just for internal structure, but for legal protection, compliance, and business credit.
At BizzHopper, we don’t just form your LLC. We help you operate like a real business—and that starts with an Operating Agreement built for credibility, protection, and funding.
What Is an Operating Agreement?
An Operating Agreement is a legally binding document that outlines how your LLC is run, who owns it, what each member’s rights and duties are, and what happens if the business changes hands, dissolves, or faces disputes.
It’s the internal rulebook for your company—defining everything from day-to-day management to profit distributions, voting rights, and procedures for adding members.
Think of it as your LLC’s legal backbone. Without it, your business can be vulnerable to disputes, disorganization, and funding rejections.
Is an Operating Agreement Required?
In most states, an Operating Agreement is not legally required—but it’s highly recommended and often functionally required for things like:
Opening a business bank account
Applying for business funding or credit
Proving ownership for legal protection
Protecting your limited liability status
Some states do require an Operating Agreement by law (such as California and New York), but even in states where it’s optional, not having one can hurt you when it’s time to grow or defend your business.
At BizzHopper, we consider it non-optional for any client serious about being fundable and legally protected.
Why You Need an Operating Agreement (Even if You’re a Solo Owner)
If you’re a single-member LLC, you might assume an Operating Agreement isn’t necessary. But here’s why you absolutely still need one:
1. Protect Your Limited Liability
An Operating Agreement separates you from your business. Without it, courts could argue that your LLC is a “disregarded entity” and pierce the corporate veil—putting your personal assets at risk.
2. Open a Bank Account or Get Loans
Banks and lenders often require a signed Operating Agreement to verify:
You are the legitimate owner
You have authority to act on behalf of the business
How funds are managed and distributed
3. Prove Your Ownership
If you ever need to sell your business, bring on investors, or defend your interests legally, the Operating Agreement is your primary ownership proof. Without it, there may be no written record confirming who owns what.
4. Support Business Credit Applications
Most major lenders and credit bureaus require this document when verifying ownership and management authority.
What’s Included in a Strong Operating Agreement?
Here’s what we include in BizzHopper’s custom Operating Agreements to ensure you’re protected, legit, and credit-ready:
1. Business Information
Legal name of the LLC
Principal office address
State of formation
Date of formation
2. Ownership Structure
Member names and addresses
Ownership percentages
Capital contributions (money, assets, etc.)
Profit and loss distributions
3. Management Setup
4. Banking & Finances
Procedures for maintaining business accounts
Bookkeeping and tax responsibilities
How and when distributions are made
5. Membership Changes
Process for adding/removing members
What happens when a member dies or exits
Buyout options and valuation methods
6. Dissolution
How the LLC can be dissolved
Order of asset distribution
Steps for winding down operations
7. Legal & Compliance Clauses
Indemnification and liability limitations
Dispute resolution methods
Governing law (state jurisdiction)
Why Lenders and Creditors Ask for This Document
If you’re applying for business credit cards, lines of credit, or a business loan, you’ll likely be asked to provide:
Why? Because lenders want to know:
Who is legally responsible
Who makes financial decisions
That you’re operating as a real business—not a hobby
Without an Operating Agreement, you may be denied access to funding even if you’re otherwise qualified.
How BizzHopper Helps
We don’t just hand you a blank template. We create a professionally structured, customized Operating Agreement as part of your formation package or as a standalone service.
You Get:
Language tailored for single- or multi-member LLCs
Funding-ready formatting with clear ownership provisions
Digital delivery you can use for banking or lending applications
Editable document you can update as your business grows
FAQs About Operating Agreements
Q: Can I write my own Operating Agreement?
Yes, but it’s risky. Generic templates often leave out key clauses needed for funding, dispute protection, or multi-member governance. Our clients prefer a ready-to-use version built by professionals.
Q: Is this document filed with the state?
No. It’s an internal agreement kept with your business records. Some banks or partners may request a copy.
Q: What happens if I don’t have one?
Your LLC may default to state laws, which may not match your intentions. For example, if you don’t define how profits are split, your state may force equal distribution—even if one member invested more.
Q: How often should I update it?
Whenever a material change occurs: ownership shifts, new members join, address changes, or major roles are redefined.
Who Needs This Document?
You need an Operating Agreement if:
You’re forming an LLC (solo or with partners)
You want to open a business bank account
You plan to apply for funding
You want legal protection from liability
You want clear rules for future disputes or changes
What If I Already Formed My LLC?
It’s not too late! You can create and adopt an Operating Agreement at any time—and we’ll help you do it right.
If you formed your business through BizzHopper but didn’t purchase this add-on initially, you can add it to your account instantly.
Why Choose BizzHopper’s Operating Agreement?
✔ Built for legal protection (Disclaimer: Not Legal Advice)
✔ Required for business credit & funding
✔ Supports LLC legitimacy
✔ Clear, editable format for your growth
We don’t just help you form a business—we help you run it like one.
Ready to Get Your Operating Agreement?
Don’t wait until you get denied for funding or hit with a dispute. Secure your business, protect your assets, and unlock full legitimacy.
Click below to get your Operating Agreement now as part of your LLC package—or order it separately.
[Get My Operating Agreement]
