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An Operating Agreement spells out how a limited company in Hong Kong will run its business and handle key decisions. It acts like a rulebook between business partners, covering everything from profit sharing and voting rights to management roles and what happens if someone wants to leave.

While not legally required under Hong Kong's Companies Ordinance, having this agreement helps prevent disputes and protects all owners' interests. It's especially valuable for small and medium enterprises where shareholders work closely together, giving them clear guidelines for running the business and managing their relationships. The agreement can be updated as the company grows or circumstances change.

Create an Operating Agreement when starting a new company in Hong Kong, especially if you have multiple business partners. It's crucial to put this in place before day-to-day operations begin, as it sets clear expectations about decision-making, profit sharing, and management responsibilities.

The agreement becomes particularly important during major company changes - bringing in new investors, expanding operations, or when partners have different visions for the business. Having these rules documented early helps avoid costly disputes and messy legal battles later. It also makes your company more attractive to potential investors by showing strong governance practices.

• Limited Liability Company Operating Agreement Single Member: Basic version for solo entrepreneurs, focusing on personal asset protection and simple management rules
• Management Agreement: Expanded operating agreement emphasizing detailed management structures and decision-making processes for larger companies
• Limited Liability Company Articles Of Organization: Comprehensive version combining operating rules with formal organizational structure, ideal for complex businesses

• Business Partners/Shareholders: Primary users who establish and agree to the Operating Agreement's terms, including their rights, responsibilities, and profit-sharing arrangements
• Company Directors: Rely on the agreement to understand their management authority, decision-making powers, and governance obligations
• Legal Counsel: Draft and review agreements to ensure compliance with Hong Kong company law and protect all parties' interests
• Company Secretary: Maintains and updates the agreement as part of corporate records, ensuring alignment with regulatory requirements
• Potential Investors: Review the agreement to understand company structure and governance before making investment decisions

• Company Details: Gather business registration number, registered address, and shareholders' information from incorporation documents
• Ownership Structure: Document each member's capital contributions, profit/loss percentages, and voting rights
• Management Rules: Define decision-making processes, meeting procedures, and role responsibilities
• Financial Arrangements: Outline distribution policies, capital calls, and accounting methods
• Exit Procedures: Plan transfer restrictions, buyout terms, and dissolution procedures
• Draft Review: Use our platform to generate a customized agreement that includes all required elements under Hong Kong law

• Company Information: Full legal name, business registration number, registered address, and member details
• Capital Structure: Initial contributions, ownership percentages, and future capital requirements
• Management Rights: Decision-making authority, voting procedures, and meeting requirements
• Profit Distribution: Method and timing of profit sharing, loss allocation, and tax treatment
• Transfer Provisions: Rules for selling ownership interests, right of first refusal, and exit procedures
• Dispute Resolution: Mediation and arbitration procedures under Hong Kong law
• Amendment Process: Procedures for modifying the agreement with member approval

An Operating Agreement is often confused with a Business Acquisition Agreement, but they serve distinctly different purposes in Hong Kong's business landscape. While both documents govern business relationships, their scope and timing differ significantly.

• Primary Purpose: Operating Agreements establish ongoing internal management rules and relationships between company members, while Business Acquisition Agreements handle one-time ownership transfers between buyers and sellers
• Duration: Operating Agreements remain active throughout a company's life, updating as needed. Acquisition Agreements typically conclude once the sale completes
• Scope of Coverage: Operating Agreements cover day-to-day operations, profit sharing, and management decisions. Acquisition Agreements focus on purchase terms, asset transfers, and transition arrangements
• Parties Involved: Operating Agreements bind company members internally. Acquisition Agreements involve external parties in a sale transaction