Document background
The Limited Liability Company Operating Agreement Single Member is a foundational document used when establishing a single-owner business entity in Canada that seeks to maintain limited liability protection while operating with the flexibility of a sole proprietorship. This document becomes necessary when an individual wants to formally establish their business as a separate legal entity while remaining the sole owner. It details crucial aspects such as capital structure, management rights, profit distribution, succession planning, and dissolution procedures. While the term "LLC" is more commonly used in the United States, this agreement adapts these principles to align with Canadian federal and provincial corporate laws, providing equivalent protection and operational guidelines. The agreement serves as both an internal governance document and as evidence of proper corporate governance for external stakeholders such as banks, investors, and regulatory authorities.
