An LLC partnership agreement is an operation agreement that structures the finances, organization and regulations among all members of a business. Although forming an LLC partnership agreement is not a legal requirement in most states, having one in place is advised by the Small Business Association.
A limited liability company (LLC) is a legal business form that blends legal elements of a partnership and a corporation. It tends to have a tax structure similar to that of a partnership, but it limits liabilities like a corporation does. One or more people can own an LLC.
When more than one person is a member of an LLC, a partnership agreement can help protect each individual partner, suggests Forbes. It clearly defines the responsibilities that each member has to the business and prepares for worst-case scenarios in the event that the business fails or one of the members dies. Important things a partnership should include are decision-making processes and tactics, who contributes what in terms of resources, how profits should be distributed among the members and the business itself, what happens to the business in the case of a death or disability and what should happen when the business dissolves.
Members do not need to hire a lawyer to draft a legally binding partnership agreement. They can draft their own copy and have a lawyer look at the final copy.