An Operating Company or "OpCo" is generally used in conjunction with a Holding Company (HoldCo) as a means to generate income and provide limited liability over real estate assets held in a HoldCo.
The sole purpose of an Operating Company is to run the day to day operations which include, but are not limited to, receiving rental payments, paying property taxes, paying condo fees, paying management fees and other inter-company dividends to cover mortgage interest payments.
Who owns an Operating Company?
An Operating Company is in most cases owned by a parent Holding Company (HoldCo), in which the HoldCo owns 100% of the shares in the OpCo. The shares in the HoldCo are then 100% owned by an individual or broken up into many different individuals which become the shareholders.
Why would anyone need an Operating Company?
This comes back to the common "OpCo/HoldCo" setup, assets have a level of protection provided by the Holding Company which are in turn used by the Operating Company to generate income.
If for example you have a tenant sue your company for damages of an unknown nature, their case would be against the Operating Company and not against yourself or your Holding Company. In a worst case scenario where monetary damages are payable, these would need to be paid by the Operating Company and would not come from the forced sale of assets in the Holding Company to pay excessive legal bills.
There are limitations to this legal liability - In some cases the legal action is able to also directly attack the Holding Company for damages caused by the Operating Company.