When starting a business with a partner or co-founder, drafting an operating agreement is a crucial step in ensuring the success and longevity of your business.

An operating agreement is a legal document that outlines the structure and rules of your business, including ownership percentages, rights and responsibilities of each member, management and decision-making processes, finance and accounting procedures, and procedures for adding or removing members.

Having a clear and comprehensive operating agreement in place can help prevent misunderstandings and conflicts between co-founders, establish a framework for making important decisions, and protect the interests of the business and its members.

Key considerations when drafting an operating agreement for co-founders include:

1. Ownership percentages: Clearly defining each co-founder`s ownership percentage in the business, including how it may change over time, can help prevent disputes and ensure that each member receives their fair share of profits and assets.

2. Roles and responsibilities: Assigning specific roles and responsibilities to each co-founder can help clarify expectations and ensure that each member knows what they are responsible for. This can also help identify gaps in skills or experience that need to be filled to ensure the success of the business.

3. Decision-making processes: Establishing a clear process for making decisions, such as through a majority vote or by assigning specific decisions to certain members, can help prevent deadlock or confusion when important choices need to be made.

4. Finance and accounting procedures: Setting rules for how the business`s finances will be managed, including how profits will be distributed, how expenses will be paid, and how financial reports will be generated, can help ensure that resources are used wisely and that the business remains financially stable.

5. Dispute resolution: Including provisions for resolving disputes between co-founders, such as through mediation or arbitration, can help avoid costly and time-consuming legal battles.

Overall, a well-crafted operating agreement can help co-founders establish a clear and effective way of working together, build trust and mutual respect, and increase the likelihood of success for their business.