My answer to How can you explain what an LLC is in layman's terms?
Answer by Ken Larson:
A Limited Liability Company is a form of incorporation allowed in most states to reduce the risk to business founders. Single person LLC’s are allowed in most states and multiple owners are deemed “Members”.
An LLC reduces personal liability risk with respect to property, finances and events. Although it does not eliminate accountability of those involved, most LLC members find it an attractive form of incorporation to best manage the risk of doing business.
An operating agreement is usually necessary to insure the LLC members understand their % of ownership, respective contributions in time, effort and financing, share of proceeds, buy out provisions and related matters.
You can view an LLC Operating Agreement sample at the “References” file in the BOX at the right margin of the site linked below: