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In this episode, Jim Hart, the founding attorney at Hawthorn Law, discusses the importance of an operating agreement for your LLC. He explains that an operating agreement serves as a contract between the business owner and themselves, particularly for single-member LLCs. Hart emphasizes that having an operating agreement is crucial for legal protection and to avoid common mistakes made by entrepreneurs during the LLC formation process. He also provides a link to a previous video identifying common pitfalls. The operating agreement outlines the structure and operational procedures of the business, ensuring clarity and stability as the business grows.