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 Virginia, a limited liability company (LLC) is governed by an operating agreement, which is an internal document that outlines the management structure and operational guidelines of the company. While not required by Virginia state law, it is highly recommended to have an operating agreement to provide clear rules and prevent disputes among members. The operating agreement should detail the financial contributions of the members, their ownership percentages, voting rights, procedures for meetings and notices, and policies for buyouts. It should also specify how profits and losses will be distributed, the roles of any officers, and the responsibilities and powers of both members and managers in member-managed and manager-managed LLCs, respectively. Virginia law provides flexibility for LLCs to structure their operating agreement as they see fit, as long as it does not conflict with state law. The Virginia Limited Liability Company Act provides the legal framework for LLCs in the state, and in the absence of an operating agreement, the default provisions of the Act will apply.