After a business is formed, or in some cases where there is a change in the ownership of a business, an agreement is recommended which governs the business. In an LLC, this is generally referred to as an operating agreement, while corporations have a set of by-laws under which the business operates. For some businesses, articles of partnership (or a “partnership agreement”) serve a similar function.
This type of agreement is often used to specify ownership and owner contributions. In addition, this legal document can declare the frequency of meetings, establish a voting process, and specify how profits and loses will be distributed among owners of the business.