LLC operating agreement

An LLC operating agreement is the governing contract of a limited liability company. It defines who owns the LLC, who runs it, how decisions get made, and how money flows to the owners (the "members"). In a tokenized deal it is one of the most important legal documents, even though investors rarely read it.

Here is why it matters so much. When an asset is tokenized through a special purpose vehicle that is an LLC, the token represents a membership interest in that LLC. The rights that interest carries do not come from the token's code - they come from the operating agreement. The code just records who holds the interest.

A tokenization operating agreement typically sets out:

• Ownership - that membership interests are represented by tokens, and how many there are.
• Management - usually "manager-managed," so a sponsor or manager runs the asset while token holders are passive members.
• Economics - how income and sale proceeds are split, often via a distribution waterfall and pro-rata sharing among members.
• Transfer rules - who may hold or receive interests, which are then enforced on-chain through whitelisting.

Because the operating agreement defines the issuer's obligations to token holders, a mismatch between what the token does on-chain and what the agreement says off-chain is a serious risk. The specific terms are negotiated per deal and governed by state LLC law.

Source: U.S. SEC (sec.gov), as of 2026.