Why Do I Need An Operating Agreement?

"Why do I need an operating agreement, partnership agreement, or shareholders' agreement?" Because any game worth playing has rules. (That is, unless you're a fan of Tegwar, in which case you should stop reading and make plans to come to my weekly game . . . and bring your wallet.)

But, back to your agreement. You need a set of rules to govern how you and your partners, investors, members, or shareholders will run your business, and more importantly, to guide you in resolving disputes. If done correctly, your agreement will lay out a procedure for resolving disputes such as: "we need more money, but Bob says he won't invest another dime"; or "Mike owns the majority share of the company and wants to sell it to Anne, but I don't want to sell" or "Steve thinks we should slash prices and target a volume-based profit, but I think we should raise prices and generate a higher-quality product."