Legal Definitions - Owners' agreement

An owners' agreement is a contract between the owners of a business that outlines their rights and responsibilities. The agreement can vary depending on the type of business, such as a partnership or limited liability company (LLC). The main purpose of an owners' agreement is to define the authority of each owner and how changes in ownership will be handled.

• A partnership agreement may state that the partnership will dissolve if one of the partners dies or wishes to leave the partnership.
• An LLC agreement may specify that ownership cannot be sold without the approval of the other owners.
• The agreement may also outline the voting or control rights of each owner, as well as a method for resolving disputes.

These examples illustrate how an owners' agreement can address important issues related to ownership and management of a business. By defining the rights and responsibilities of each owner, the agreement can help prevent conflicts and ensure that the business operates smoothly.