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Operating Agreement
I need an operating agreement for a newly formed LLC in Qatar, outlining the roles and responsibilities of each member, profit distribution, and decision-making processes, with provisions for dispute resolution and procedures for adding or removing members.
What is an Operating Agreement?
An Operating Agreement sets the ground rules for how a Limited Liability Company (LLC) runs in Qatar. It spells out each member's rights, responsibilities, and ownership stakes while following Qatar Commercial Companies Law No. 11 of 2015. Think of it as your company's internal playbook.
Beyond just meeting legal requirements, this agreement protects business owners by clearly defining profit sharing, decision-making processes, and exit procedures. It helps prevent disputes between members and proves especially valuable for multi-owner LLCs operating under Qatar Financial Centre regulations. Most Qatari banks and government offices will ask to see this document during important business transactions.
When should you use an Operating Agreement?
Create an Operating Agreement right when you form your LLC in Qatar - not months later when problems arise. This foundational document becomes essential during key business moments: bringing in new investors, applying for bank loans, or expanding operations under Qatar Financial Centre oversight.
The agreement proves particularly valuable when navigating member disputes, ownership transfers, or profit distribution decisions. Companies expanding into Qatar's free zones need this document ready for regulatory compliance and stakeholder negotiations. Having it in place early helps avoid costly legal battles and keeps your business running smoothly as it grows.
What are the different types of Operating Agreement?
- Business Operating Agreement: Standard template for most Qatar LLCs, covering basic management and profit-sharing structures
- Operating Agreement For Corporation: Enhanced version with corporate governance provisions aligned with QFC requirements
- Joint Operating Agreement: Specialized format for joint ventures and partnerships under Qatari law
- Small Business Operating Agreement: Simplified version for small enterprises with straightforward ownership structures
- Non Profit Operating Agreement: Tailored for charitable organizations following Qatar's non-profit regulations
Who should typically use an Operating Agreement?
- LLC Members: Primary stakeholders who sign and are bound by the Operating Agreement, sharing ownership and decision-making rights
- Company Managers: Execute daily operations according to the agreement's management structure and protocols
- Legal Counsel: Draft and review agreements to ensure compliance with Qatar Commercial Companies Law
- QFC Authorities: Review Operating Agreements for companies registered within the Qatar Financial Centre
- Ministry of Commerce Officials: Verify agreement compliance during company registration and major business changes
- Business Partners: Reference the agreement when conducting transactions or forming strategic relationships
How do you write an Operating Agreement?
- Member Details: Gather full legal names, Qatar ID numbers, and ownership percentages of all LLC members
- Capital Structure: Document initial investments, profit-sharing ratios, and capital contribution schedules
- Management Framework: Define voting rights, decision-making processes, and management responsibilities
- Business Information: Include company name, QFC/local registration details, and principal business activities
- Exit Strategy: Outline procedures for member withdrawal, share transfers, and company dissolution
- Platform Usage: Use our AI-powered platform to generate a legally compliant Operating Agreement, customized for Qatar's regulations
- Document Review: Verify all member information and ensure alignment with Qatar Commercial Companies Law
What should be included in an Operating Agreement?
- Company Information: Full legal name, QFC/local registration number, registered office address in Qatar
- Membership Structure: Capital contributions, profit-sharing ratios, voting rights aligned with Qatar Companies Law
- Management Powers: Decision-making authority, meeting procedures, member responsibilities under Qatari regulations
- Financial Provisions: Distribution rules, accounting methods, fiscal year definition
- Transfer Restrictions: Share transfer procedures, right of first refusal, succession planning
- Dispute Resolution: Qatar law as governing authority, local arbitration procedures
- Amendment Process: Procedures for modifying agreement terms with member consent
- Dissolution Terms: Winding-up procedures following Qatar Commercial Companies Law
What's the difference between an Operating Agreement and a Business Acquisition Agreement?
An Operating Agreement is often confused with a Business Acquisition Agreement, but they serve distinctly different purposes in Qatar's legal framework. While both documents relate to business operations, their scope and timing differ significantly.
- Purpose and Timing: Operating Agreements govern ongoing LLC management and member relationships, while Business Acquisition Agreements handle one-time business purchases or mergers
- Party Involvement: Operating Agreements bind internal LLC members and managers, whereas Business Acquisition Agreements involve separate buying and selling entities
- Legal Framework: Operating Agreements align with Qatar's LLC regulations under Law No. 11 of 2015, while Business Acquisition Agreements follow merger and acquisition laws
- Duration: Operating Agreements remain active throughout company operations, but Business Acquisition Agreements conclude once the transaction completes
- Content Focus: Operating Agreements detail management structure and profit sharing, while Business Acquisition Agreements outline purchase terms and asset transfers
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