Document background
While the Limited Liability Company Operating Agreement is a U.S. concept, this document has been adapted for the Canadian legal environment where corporations are the equivalent business structure. It serves as the fundamental governance document for privately held corporations in Canada, combining elements of traditional corporate bylaws and shareholder agreements. The agreement is essential when establishing a new corporation or reorganizing an existing one, providing comprehensive coverage of corporate governance, management structure, shareholder rights and obligations, and operational procedures. It ensures compliance with both federal and provincial corporate laws while offering flexibility to accommodate specific business needs and growth. This document is particularly crucial for corporations with multiple shareholders, as it helps prevent and resolve potential disputes by clearly defining roles, responsibilities, and procedures.
