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An LLC operating agreement is a legally binding document that outlines the ownership, management, and structure of a limited liability company (LLC). It details aspects such as meeting schedules, the appointment of a registered agent, selection of managers, and membership changes. An LLC combines the liability protection of a corporation with the tax benefits of a partnership and is regulated by state LLC laws. The agreement clarifies the company's management structure, profit and asset distribution, and member agreements. Importantly, members are not personally liable for business debts and liabilities. It is advisable to establish the operating agreement when the LLC is formed.