Two documents that many small business owners get confused about are Operating Agreements and Articles of Incorporation. There is a good chance that you will need some version of both documents for your business, so it is important to understand the purpose of each one. 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 owners. Once the document is signed by the members of the limited liability company, it acts as an official contract binding them to its terms. Articles of Incorporation are important documents because they serve as legal proof that your company is established in your state, and provide the state government with information about the main aspects of your business.
