Kelly Williams, founder and manager of Slate Law Group, said a company agreement is especially important for distinguishing how your LLC should operate in the eyes of the state, which is why even a person`s LLCs need it. A common, fundamental misunderstanding about the single member LLC company agreement is that this document gives much more power than it actually does. In reality, your company agreement will not exceed the law, no matter what it says. Thus, you do not lose your limited liability protection simply because you do not have an agreement. And you won`t be able to circumvent the law just because you say questionable behavior (like using your business account as a personal piggy bank) is correct in your agreement. To avoid litigation within your company, make sure that your company agreement is fully tailored to your business.