Operating agreement or partnership agreement?

The short version

An LLC uses an operating agreement. A partnership agreement is for a business set up as a partnership. Since LLCs became widely available in the 1990s, most people starting a business together form an LLC, so the operating agreement is the document most partners will actually need.

What both usually cover

• Who the owners are and what each contributed
• How profits, losses, and payouts are shared
• Who manages the business and who decides what
• How new owners join and how owners leave
• What happens if the business closes

What neither one does for you

Neither document makes partners agree. In practice, many partners either sign a generic agreement from the internet or sign nothing at all. Either way, the real conversation never happens, and the gaps show up later, when money, stress, or change hits.

Where your expectations live: the MOU

Stay Partners helps you write a memorandum of understanding (MOU): a shared record of the assumptions and expectations you and your partner actually agreed to, in your own words. It isn't intended to be legally binding. Its job is to prevent the misunderstandings that turn into legal problems, and to give your lawyer a clear starting point.

Where to get the right legal document

What your operating or partnership agreement must say depends on your business and local law. A lawyer of your own can tell you. You'll spend significantly less of their time if you bring an MOU you've already worked out together.

What is the difference between an operating agreement and a partnership agreement?

An operating agreement is the governing document for an LLC. A partnership agreement governs a general or limited partnership. Both cover ownership, money, roles, and decisions; which one you need depends on how your business is set up legally.

Does a single-member LLC need an operating agreement?

Many states don't require one, but lawyers often recommend it anyway because it helps show the business is separate from you personally. Ask a lawyer in your state what makes sense for your situation.

Can we write our own operating agreement?

You can start from a template, and many people do. The risk isn't that the document is invalid. It's that a template answers questions the two of you never discussed. Talk through the expectations first, then decide whether a lawyer should draft or review it.

Is a Stay Partners MOU an operating agreement?

No. The MOU is a plain-language record of what you and your partners have talked through and accepted. It's not intended to be legally binding. It's a strong starting point to bring to a lawyer who drafts the actual operating or partnership agreement.