What is an Operating Agreement?
An Operating Agreement is the contract that governs an LLC, setting out who manages it, how decisions are made, how profits are distributed, and what rights members hold.
In tokenized real estate, the operating agreement of the SPV is the legal foundation of every property token issued against that entity.
What an Operating Agreement Does
The operating agreement defines the internal rules of the LLC. It identifies the manager, sets out their authority and limits, allocates economic rights between members, and establishes the procedures for major decisions such as sale, refinancing, or amendment of the agreement itself.
Where the agreement is silent, the default rules of the LLC’s home state apply. In Delaware and other LLC-friendly jurisdictions, members have broad freedom to override defaults by contract, which is why the operating agreement is the document that actually defines how a tokenized SPV functions in practice.
Token Holder Rights in the Operating Agreement
In a tokenized SPV, the operating agreement recognizes token holders as members of the LLC. Each token represents a defined membership interest, and the agreement spells out exactly what economic and governance rights attach to that interest.
Economic rights typically include a pro-rata share of distributions, a pro-rata share of disposal proceeds, and information rights such as access to financial statements. Governance rights typically include voting on major decisions and approval of any change to the operating agreement itself.
Manager Authority and Limits
Most tokenized SPVs are manager-managed, meaning a designated manager runs day-to-day operations while token holders hold passive economic and governance interests. The operating agreement defines what the manager can do unilaterally and what requires a member vote.
Routine matters such as collecting rent, paying expenses, and distributing income sit with the manager. Major actions including sale of the property, refinancing, dissolution of the SPV, and amendment of the agreement typically require approval by a defined threshold of token holders, often a simple or supermajority vote depending on the matter.
Transfer Restrictions and the Smart Contract
The operating agreement also defines who can be a member. Transfer restrictions, including accreditation requirements, jurisdictional limits, and minimum holding periods, are written into the agreement and reflected in the smart contract that controls token movement.
This alignment is what makes tokenization legally clean. The agreement is the rule, the contract is the enforcement, and a transfer that breaches the rule is rejected at the protocol level rather than discovered later in an audit. The two layers reinforce each other rather than operating in parallel.
Operating Agreements at Node Proptech
Each Node Proptech SPV is governed by an operating agreement that recognizes token holders as members, defines their economic and governance rights, sets the manager’s authority and limits, and encodes transfer restrictions consistent with the offering exemption. The agreement and the smart contract are designed in tandem so that the legal rules and the protocol enforcement remain aligned through every transfer, distribution, and decision in the life of the SPV.