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An Operating Agreement is a legal document that sets out how your company will run day-to-day and make key decisions. It defines each member's roles, rights, and responsibilities within the business, similar to how Singapore's Companies Act governs corporations but tailored specifically for your organization.

For Singapore businesses, especially Limited Liability Companies (LLCs), this agreement spells out crucial details like profit sharing, voting rights, and management structure. It helps prevent disputes by clarifying everyone's expectations upfront and provides clear procedures for handling major changes, from bringing in new members to eventually closing the business.

Create an Operating Agreement right when you start your business in Singapore, especially if you're forming an LLC with multiple owners. This foundational document becomes essential before taking on investors, opening business bank accounts, or beginning significant operations.

It's particularly important to have this agreement in place before disagreements arise about profit distribution, decision-making authority, or member responsibilities. Many businesses also update their Operating Agreement when adding new partners, changing management structure, or expanding into new markets - times when clear rules and procedures become crucial for smooth operations.

• Limited Liability Company Operating Agreement Single Member: Designed for solo entrepreneurs, focusing on asset protection and business continuity rules.
• Multi Member Operating Agreement: Built for partnerships, detailing voting rights, profit sharing, and conflict resolution.
• Manager Managed Operating Agreement: Separates ownership from management, ideal for investors who aren't involved in daily operations.
• Limited Liability Operating Agreement: Emphasizes liability protection and compliance with Singapore's LLC regulations.

• Business Owners/Members: Primary stakeholders who sign and are bound by the Operating Agreement, determining their rights, responsibilities, and profit shares.
• Company Managers: Key decision-makers responsible for implementing the agreement's management structure and operational guidelines.
• Corporate Lawyers: Draft and review the agreement to ensure compliance with Singapore's Companies Act and protect all parties' interests.
• Business Partners: External stakeholders who rely on the agreement to understand the company's governance structure before entering partnerships.
• Company Secretary: Maintains and updates the agreement as part of corporate record-keeping requirements.

• Business Details: Gather your UEN number, registered address, and business scope from ACRA registration documents.
• Member Information: Compile details of all owners, including identification numbers, shareholding percentages, and capital contributions.
• Management Structure: Decide on manager-managed or member-managed format, outlining specific roles and responsibilities.
• Financial Arrangements: Document profit-sharing ratios, distribution schedules, and capital call procedures.
• Decision Protocols: Define voting rights, meeting requirements, and procedures for resolving disputes.
• Exit Strategy: Plan procedures for member withdrawal, company dissolution, or ownership transfer.

• Company Identity: Full legal name, UEN number, registered office address, and business purpose.
• Ownership Structure: Member details, capital contributions, and profit/loss allocation percentages.
• Management Provisions: Decision-making processes, voting rights, and meeting procedures.
• Financial Arrangements: Capital accounts, distribution methods, and tax treatment policies.
• Transfer Restrictions: Rules for selling ownership interests and admitting new members.
• Dissolution Terms: Procedures for winding up the business and asset distribution.
• Governing Law: Clear statement of Singapore jurisdiction and applicable regulations.

An Operating Agreement differs significantly from a Business Acquisition Agreement in both purpose and scope. While both are crucial business documents in Singapore, they serve distinct functions in your company's legal framework.

• Primary Purpose: Operating Agreements govern ongoing internal business operations and relationships between members, while Business Acquisition Agreements handle one-time business purchase transactions.
• Timeline Focus: Operating Agreements are living documents that guide day-to-day operations indefinitely, whereas Business Acquisition Agreements cover a specific transaction period and its immediate aftermath.
• Key Parties: Operating Agreements involve company members and managers, while Business Acquisition Agreements are between buyers and sellers of business assets or shares.
• Legal Scope: Operating Agreements cover management structure, profit sharing, and member duties, while Business Acquisition Agreements detail purchase terms, warranties, and transfer conditions.