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I am part of an L.L.C. and have heard a lot about operating agreements and founder's agreements. Can anyone clarify the differences between the two for an L.L.C.

Thanks!

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This Q was asked on Quora, too. Here is the heart of the answer that I posted there:

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An operating agreement applies only to, and specifies the ownership and management of, an LLC.

A founders' agreement can address whatever issues company founders want to document to establish a fair ownership and working relationship and to reduce the likelihood of misunderstanding or animosity down the road. It usually is thought of in the context of a corporation (addressing, for example, vesting, voting and restrictions on transfer of stock), but it could, conceivably, apply to an LLC, too.

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Dana, thanks for your response. If a person has NOT founded the company (LLC) but is a stakeholder (<5%) what sort of contract would be appropriate for them? Would the founder's agreement qualify for them as well even though they are not a founder? – Li Zhou Nov 4 '11 at 14:59
The <5% member's rights and obligations (like those of all other members) should be specified in the Operating Agreement. – Dana Shultz Nov 4 '11 at 23:16
Thanks, appreciate your help! – Li Zhou Nov 7 '11 at 15:13
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The operating agreement is a document, usually drafted upon formation, that basically includes all topics covered by a so-called "founders agreement": restrictions to transfer of ownership, profit splitting, what happens if the company needs money, etc.

The founders' agreement, for an LLC, is like the termsheet of the operating agreement. A shorter, less technical agreement between the founders where they agree on the business terms ($$$ in particular) that will be further developed in the operating agreement.

Have a look at this article for more detailed info. Here is an example of a real-life founders' agreement (caution: not reviewed by a lawyer)

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An Operating Agreement is not required by law (this may vary by state). An LLC can legally operate without one, although it is not recommended. Without an Operating Agreement, the LLC is bound by the state's LLC Act. My understanding is that the only thing that is legally required is the Articles of Organization. – Zuly Gonzalez♦ Oct 29 '11 at 23:02
Yes you are right, varies state-by-state. Edited answer accordingly – Veronica Oct 31 '11 at 14:39
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Corrections to the answer: (1) The OA is not a "corporate" document, and "incorporation" does not apply to LLCs, because LLCs are not "incorporated", they are "formed". (2) The OA normally is not filed with the state - it is a private agreement among the relevant parties (which can include the LLC, its members, and its managers). – Dana Shultz Nov 4 '11 at 23:20

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