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Nevada is considered a haven for business owners who want to create a new corporation or a limited liability company or LLC. The state of Nevada offers complete protection to the officials, agents and members of the LLC, in case of a lawsuit filed against them. In order to operate a limited liability company in Nevada, an operative agreement is necessary. The operating agreement defines the nature of business, general operation and conduct of the affairs, of the company. This agreement also outlines the voting powers of each member and the buy-sell requirements that govern the stand taken by the company in case of members want to sell their interest.

An LLC operating agreement enables the business owners to constitute their financial and professional relationships with their partners and employees. The operating agreement establishes the percentage of ownership of each partner in the LLC and the distribution of profit, along with the responsibilities assigned to each one of them. It is good to have the operating agreement properly documented and signed by all members. This helps in avoiding confusion and misunderstanding, as it specifies the limited liability status clearly. The operating agreement also addresses the line of action in the case of a partner's death, disability or exit from the company.

The main rationale behind creating an operating agreement is that, it enables the business owners to prove their limited personal liability status in a court of law. A formal, written operating agreement lends credibility to the existence of a limited liability company.

Business owners can obtain the services of a professional attorney to draft the operating agreement. They can take a look at sample agreements and model their own operating agreement on those, in accordance with the laws of the state. Software is available to draw an operating agreement.