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A multi-member LLC operating agreement is a contract among LLC owners. It sets each member’s share, contribution and vote, and this free template puts yours in writing. Co-owners use it, especially before money or control disagreements start.
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A multi-member LLC operating agreement is the contract among the owners of a limited liability company with several members, and it sets out who owns what, who decides, and how money moves through the company.
LLC stands for limited liability company, and its owners are called members. Members usually put something into the company, such as cash, property, or work, in exchange for a part of the profits and a say in how the business is managed.
The agreement is a separate paper from the articles of organization, which start the company. The agreement holds the members’ own rules for running the business together.
A single-member LLC has one owner who decides alone, while a multi-member LLC has several owners who have to agree on how to share money, control, and the exit of anyone who leaves.
The main differences at a glance:
A company with one owner fits the single-member LLC operating agreement better. For other setups, browse our LLC operating agreement templates.
Whether a multi-member LLC needs an operating agreement depends on its state: New York says the members shall adopt a written operating agreement (N.Y. Ltd. Liab. Co. Law § 417).
Missouri says the member or members of a limited liability company shall adopt an operating agreement (Mo. Rev. Stat. § 347.081).
Nevada takes the other approach: a limited-liability company may, but is not required to, adopt an operating agreement (Nev. Rev. Stat. § 86.286).
Co-owners have practical reasons to write one even where the statute leaves the choice to them:
Without an operating agreement on a point, the state’s LLC statute fills the gap: in Florida, the chapter governs a matter to the extent the agreement does not otherwise provide for it (Fla. Stat. § 605.0105(2)).
In Texas, the title and the applicable provisions of Title 1 govern the company’s internal affairs to the extent the company agreement does not otherwise provide (Tex. Bus. Orgs. Code § 101.052).
Those default terms were not written with your company in mind. A member’s divorce, a death, or a dispute over a large purchase are easier to handle when the members settled the answer in advance. The more detailed your operating agreement is, the less likely your members will disagree about the basic management of the LLC.
A bank, a lender, an investor, or a registered agent may ask to see your operating agreement before working with your LLC, so keep a signed copy ready from the start.
Here are a few more people who might need to see your operating agreement before they start working with you.
This table shows how each listed LLC statute describes a multi-member operating agreement, such as whether it can be oral or written and whose agreement it takes.
| State | What the statute says about the agreement | Citation |
|---|---|---|
| California | The agreement of all the members, whether oral, in a record, implied, or in any combination | Cal. Corp. Code § 17701.02 |
| Georgia | Any agreement, written or oral, of the member or members | O.C.G.A. § 14-11-101 |
| Illinois | The agreement of all of the members, whether oral, in a record, implied, or in any combination | 805 ILCS 180/1-5 |
| Missouri | Members shall adopt one, and it is any valid agreement, written or oral, among all members | Mo. Rev. Stat. § 347.081; Mo. Rev. Stat. 347.015 |
| Nevada | A company may, but is not required to, adopt one; adopted only by the unanimous vote or unanimous written consent of the members | Nev. Rev. Stat. § 86.286 |
| New Jersey | The agreement of all the members, whether oral, in a record, implied, or in any combination | N.J.S.A. 42:2C-2 |
| New York | Members shall adopt a written operating agreement | N.Y. Ltd. Liab. Co. Law § 417 |
| Texas | Called a company agreement: any agreement, written, implied, or oral, of the members | Tex. Bus. Orgs. Code § 101.001 |
| Virginia | Need not be in writing, unless the articles or a written operating agreement specifically requires otherwise; initially agreed to by all of the members | Va. Code Ann. § 13.1-1023 |
The table covers the states readers search for most, plus Missouri, Nevada, and New York, where the statute speaks directly to adoption. It does not list every state, and each state has its own LLC act.
A sample operating agreement for a two-member LLC covers the same core terms as any multi-member agreement, plus a plan for the tie that comes up when the two owners disagree on a decision.
The wording below shows how a few key clauses can read. It is an illustration with made-up names and figures, not a complete agreement.
Example: Members and contributions. Dana Reyes contributes $25,000 in cash for a 50% membership interest. Sam Cole contributes equipment valued at $25,000 for a 50% membership interest.
Example: Profits and losses. The Company allocates profits and losses to the Members in proportion to their membership interests, and it reviews distributions at the end of each quarter.
Example: Tie vote. If the Members cannot agree on a decision within 30 days, they will meet with a mediator they choose together before either Member takes any other step.
Example: Buyout. A Member who wants to leave offers their interest to the other Member first, at a price set by an independent appraiser.
Two members with equal shares can break a tie by agreeing on the method in advance, because a split vote with no method behind it can stop the company from acting at all.
A three-member LLC can settle most decisions by vote, so its agreement should say what counts as a majority and which big decisions call for every member’s approval.
Ownership shares and votes do not have to match, so spell out whether votes follow each member’s percentage or count one per member. Two members who hold rental property together face the same questions, plus who handles tenants and repairs and how rent reaches each member.
A multi-member LLC operating agreement should cover company details, contributions, profit and loss sharing, management, bookkeeping, transfers, and dissolution, and the exact terms depend on your company and its members.
Virginia allows any provisions regarding the company’s affairs and the conduct of its business, to the extent they are not inconsistent with the laws of the Commonwealth or the articles of organization (Va. Code Ann. § 13.1-1023).
The company formation part of the agreement names your LLC and gives its formation date, its purpose, its office location, and the registered agent who can be contacted on its behalf.
The capital contributions part says what each member puts in at the start, when more can be asked for, how profits and losses are shared, and when members can expect distributions or regular pay.
More detail is typically a better option here, since money is where co-owners tend to disagree first.
New York protects these terms: except as otherwise provided in the operating agreement or the articles of organization, no amendment that increases a member’s obligation to contribute, alters the tax allocation of items of income, gain, loss, deduction or credit, or alters how a member’s distributions are computed can be made without the written consent of each member adversely affected (N.Y. Ltd. Liab. Co. Law § 417).
A member-managed LLC is run by all of its owners, while a manager-managed LLC is run by one or more chosen managers, and the place for that choice differs: the operating agreement, the articles of organization, or either one.
In New Hampshire, a limited liability company shall be managed by its members unless the operating agreement provides otherwise, and the agreement may provide for management in whole or in part by a manager or managers (N.H. Rev. Stat. Ann. § 304-C:47).
In Rhode Island, the members shall manage the business and affairs of the company unless the articles of organization or a written operating agreement provide for management by or under the authority of one or more managers in accordance with § 7-16-15 (R.I. Gen. Laws § 7-16-14).
In Louisiana, the business of the company shall be managed by the members except as otherwise provided in the articles of organization, subject to any provision in a written operating agreement restricting or enlarging the management rights and duties of any member or group or class of members (La. Rev. Stat. § 12:1311).
Read your own LLC act before relying on the agreement alone for this choice.
A manager-managed agreement works well when some members invest and others run the business. Name the manager, list what they can decide alone, and list the decisions that go back to the members.
The bookkeeping part says how the LLC tracks money and what it keeps, which matters more as the member count grows because the books show each member how the company is doing.
Rhode Island says each limited liability company shall keep at its principal office a current list of the full name and last known business address of each member and manager, copies of records that would enable a member to determine the capital values and relative voting rights of the members, and a copy of any written operating agreement, among other items (R.I. Gen. Laws § 7-16-22(a)).
The transfer part says how a member can sell or pass on an interest and what happens when a member leaves, becomes incapacitated, goes bankrupt, or dies, so the company can keep running.
Connecticut says the obligations of the company and its members to a transferee or a person dissociated as a member are governed by the operating agreement (Conn. Gen. Stat. § 34-243f).
An agreement cannot take away every exit: in the District of Columbia, it may not vary the power of a person to dissociate, except to require that notice of dissociation be in a record (D.C. Code § 29-801.07).
The dissolution part says how and when the LLC ends, including the circumstances that trigger it, how assets are dealt with on the way out, and when a company formed for one purpose closes.
In Virginia, a court of equity may enforce an operating agreement by injunction or other relief it considers fair and appropriate, and as an alternative, when the provisions of § 13.1-1047 are applicable, the court may order dissolution of the company (Va. Code Ann. § 13.1-1023).
An operating agreement cannot change every rule: the California and Nevada sections below each name limits that the members cannot write away.
In California, an operating agreement shall not vary the company’s capacity to sue and be sued in its own name, the applicable law, or the power of the court under Section 17702.04, and, subject to the exceptions in that section, shall not eliminate the duty of loyalty, the duty of care, or any other fiduciary duty (Cal. Corp. Code § 17701.10).
In Nevada, an operating agreement may not eliminate the implied contractual covenant of good faith and fair dealing (Nev. Rev. Stat. § 86.286).
Fill out the multi-member LLC operating agreement by gathering each member’s details first and then completing the parts of the template in the order they appear on the form.
The template has ten parts, and you fill them in order. Gather the details below first, so you can work through every part in one sitting and move on to the next steps sooner.
List the full name of every owner in the basic information part, because this part defines who counts as a member for the rest of the agreement.
The form gives you several lines for names. Spell each name the way it appears on that person’s other company papers.
Add the details of the company itself after the members, including its name, its purpose, its current offices, and the registered agent your business partners can contact.
Enter your LLC’s name, its formation date and time, and the state where your company is registered.
Write down who will contribute what to the company at the start, whether that is cash, property, or work, so that the seed money behind the business is clear.
This part also lets you plan for additional contributions in the future, as needed. Say who decides when more is called for and what happens if a member cannot pay.
Confirm how the company distributes profits and shares the cost of losses among all the members, since this part is mostly set text that you read closely rather than fill in.
A tax adviser can check that the split matches how the members expect to report their income.
Review the indemnification clause, which says the company will compensate a member who is sued or faces financial consequences for actions taken on behalf of the LLC, so that every member has the same protection.
The limits on this clause vary. In California, the provisions of Section 17704.08 shall only be varied by a written operating agreement (Cal. Corp. Code § 17701.10).
Under that condition, a California agreement may alter or eliminate the indemnification provided by subdivision (a) of Section 17704.08 and may eliminate or limit a member’s or manager’s liability to the company and members for money damages, except for breach of the duty of loyalty, a financial benefit received to which the person is not entitled, a member’s liability for excess distributions under Section 17704.06, intentional infliction of harm on the company or a member, and an intentional violation of criminal law (Cal. Corp. Code § 17701.10).
Read the powers and duties of managers closely, because this part is usually already written in free LLC operating agreement forms and covers how the company operates and how members make decisions.
It usually also sets terms for a member’s exit, with the details in the transfer step.
Those terms have limits that differ by state: in Illinois, the agreement may not restrict the power of a member to dissociate under Section 35-50, although it may determine whether a dissociation is wrongful (805 ILCS 180/15-5).
In the District of Columbia, the agreement may not vary the power of a person to dissociate, except to require that notice of dissociation be in a record (D.C. Code § 29-801.07).
Set out how the company covers its expenses and tracks its income in the accounting management part, along with your plan for paying taxes and other operating costs.
This part usually gives each member a capital account, which shows that member’s running stake in the company.
Review how a member can leave the LLC in the transfer part, which usually deals with moving a membership to someone else and gives the other members the first chance to buy.
Check that it also covers a member who becomes incapacitated, goes bankrupt, or dies, since those are the exits that nobody plans for.
Check the reasons for ending the LLC in the dissolution part, which lists common ones such as the members’ agreement, and add any other reasons that fit your company.
A company formed for one project can name the end of that project as a reason to close.
Read the general provisions, confirm that everyone accepts the terms, and then have every member of the multi-member LLC sign and date the finished agreement before you rely on it.
Every member should sign and date the operating agreement, because a signature from each owner is the clearest proof of who accepted its terms when a bank or a new partner asks.
Some statutes reach beyond the signature page. In Texas, a member or manager is bound by the company agreement, regardless of whether that person signs it (Tex. Bus. Orgs. Code § 101.052).
In Virginia, the company itself is bound by its operating agreement whether or not it executes the agreement (Va. Code Ann. § 13.1-1023).
Change a multi-member LLC operating agreement by following the amendment method it states, because statutes such as Virginia’s and Nevada’s make that method controlling and fall back on every member’s approval when it says nothing.
In Virginia, if the articles of organization or the operating agreement provide for the manner of amendment, the agreement may be amended only in that manner or as otherwise permitted by law; if neither does, all of the members must agree to any amendment (Va. Code Ann. § 13.1-1023).
In Nevada, unless otherwise provided in the operating agreement, amendments may be adopted only by the unanimous vote or unanimous written consent of the persons who are members at the time of amendment (Nev. Rev. Stat. § 86.286).
Yes, you can fill out the multi-member LLC operating agreement online by selecting the Create My Document button at the top of this page and answering a few simple questions. You can save your progress, finish on any device, and download and print the finished agreement anytime.
An LLC membership agreement often refers to an operating agreement, because the name matters less than what it covers: in Delaware, the term reaches any agreement of the members, whether referred to as a limited liability company agreement, operating agreement or otherwise (6 Del. C. § 18-101).
Future members can sign before the LLC is formed in some states: in New Jersey, two or more persons intending to become the initial members may make an agreement providing that upon formation it will become the operating agreement (N.J.S.A. 42:2C-12).
New York sets an outer limit: an operating agreement may be entered into before, at the time of or within ninety days after the filing of the articles of organization (N.Y. Ltd. Liab. Co. Law § 417).
A new member is treated as accepting the existing agreement in some states: in Illinois, a person that becomes a member of a limited liability company is deemed to assent to the operating agreement (805 ILCS 180/15-5). New Jersey says the same (N.J.S.A. 42:2C-12).
Having the new member sign a copy anyway keeps the company’s papers complete and leaves no doubt about the terms they joined under.
Give each member a signed copy and keep one with your company records. Keep a digital copy handy too, because a bank, a lender, or your registered agent may ask to see it.
The statutes cited on this page are listed here by jurisdiction, and each linked citation above opens the official site that publishes the section.
General information, not legal or tax advice.
