Free LLC Operating Agreement Template

Updated: Nov 7, 2026

The articles of organization create the company. The operating agreement sets the rules inside it. This guide covers single-member and multi-member agreements, the clauses to include, how to draft and sign the agreement, and a full sample.

An LLC limits its members' personal liability for company debts. That protection comes from the state's LLC statute itself, not from signing an operating agreement.

Corporate Operating Agreement vs. LLC Operating Agreement

An operating agreement is the internal contract of an LLC, so a search for a corporate operating agreement template usually leads to an LLC agreement. A corporation runs under bylaws adopted by its board, often with a shareholders' agreement among its owners.

The two sets of documents cover the same ground in different words:

C corporation tax status and the operating agreement

An LLC that elects to be taxed as a C corporation keeps its operating agreement. The election changes how the IRS taxes the company, not the document that governs it. A search for a "C corp operating agreement" usually comes from the owner of such an LLC, or from founders choosing between the two forms.

Single-Member vs. Multi-Member Operating Agreements

An operating agreement is written for one member or several, and its scope grows with the number of owners. Both types set out ownership, management, and the rules of the company. A multi-member agreement also covers the relationships between the owners.

Single-member LLC operating agreement

A single-member LLC operating agreement records how the owner runs the company as a business separate from the owner's personal affairs. It describes the owner's role and the role of any manager or registered agent.

A one-member agreement is not unenforceable merely because only one person is a party to it (Md. Code, Corps. & Ass'ns § 4A-402; 6 Del. C. § 18-101). In the case of a one-member Georgia LLC, a writing signed by the member that states it is intended as a written operating agreement counts as one (O.C.G.A. § 14-11-101).

The agreement is usually not filed with a government agency. The owner keeps it with the company's records, often at the principal place of business.

Multi-member LLC operating agreement

A multi-member LLC operating agreement is built for companies with several owners. It records ownership percentages and how the members work together. Every member should sign it and keep a copy, and the company keeps the original with its own papers.

A multi-member agreement usually covers:

• LLC management
• Procedures for buying and selling members' interests (on a sale, disability, or death)
• Ownership percentages for each member
• Rights and obligations of the owners
• Voting powers of each member
• Methods for allocating profits and losses
• Meeting procedures

Family LLC operating agreement

A family LLC operating agreement is a multi-member agreement among relatives, often used to hold a farm, rental property or family business. It usually adds transfer limits that keep units inside the family and a buyout clause for a member's death or divorce. Many family agreements also name one manager to run the company while other relatives hold units without a vote on daily matters.

50/50 LLC operating agreement

A 50/50 operating agreement splits ownership equally between two members, so its main job is to break a tie. The agreement names a deadlock method, such as mediation, a buy-sell clause that lets one member buy the other out, or a casting vote on set topics. Without one, an even vote leaves the company unable to decide.

Does an Operating Agreement Have to Be in Writing?

An operating agreement can be oral or implied under most of the LLC acts listed below. A written agreement still settles questions an oral one leaves open, and banks often ask to see one before they open a company account.

The table lists states whose LLC act, in the sources behind this page, defines the form of the agreement.

California's acceptance of an oral agreement has a limit: the provisions listed in Cal. Corp. Code § 17701.10 "shall only be varied by a written operating agreement". The fiduciary duties of a manager of a manager-managed company, and of a member of a member-managed company, "shall only be modified in a written operating agreement with the informed consent of the members" (Cal. Corp. Code § 17701.10).

Check the LLC act of the state where the company is formed.

What Should an LLC Operating Agreement Include?

An LLC operating agreement records who owns the company, who manages it, and how decisions and money are handled. A clear agreement helps show that the LLC is run as a separate entity, which supports its members' limited liability.

Formation of the LLC

The formation article states the date of the agreement, the company's formation date, its formal name, and its registered office. It also gives the business purpose, the duration of the agreement, and whether the LLC is single-member or multi-member.

Equity structure

The equity article sets what each member owns and contributes. It usually has these clauses:

• Membership interest: each member's economic interest (a share of profits) and management interest (a share of votes).
• Classes of membership interests: the types of interest the LLC issues, such as common, non-voting or profits interests.
• Contributions and capital accounts: what each member puts in, such as cash, property, promissory notes or services, and whether more contributions can be called later.
• Allocation of profits and losses: how profits and losses are shared. Many agreements share them in proportion to ownership, and members can agree on a different split.

Profits interests

A profits interest gives a member a share of future profits and growth without a share of the capital already in the company. The agreement states the date the interest starts, the value the company had on that date, and any vesting schedule tied to the member's work.

Internal management

The management article names who runs the company day to day. It covers:

• Management authority: whether the members manage the LLC or appoint managers.
• Managers' names and number: who the managers are and how many serve.
• Powers and compensation: what managers can decide alone and whether they are paid.
• Appointment: how managers are chosen.
• Manager meetings: when managers meet and which actions they can take without a meeting.
• Removal and replacement: how a manager is removed or replaced.

Voting procedure

When the agreement is silent, the state's default voting rule applies, and that rule differs by state. The voting article sets the company's own rules:

• Voting rule: votes in proportion to ownership, or one vote per member.
• Veto rights: named members or managers who can block set decisions.
• Supermajority votes: decisions, such as selling the business, that need a larger majority than usual.

Limitation of liability and indemnification

The liability article states when the company protects its members and managers:

• Exculpation: the situations in which members and managers are held harmless for acts done for the LLC.
• Indemnification: when the company pays a member's or manager's costs of claims, losses or damages that arise from their role.

Books and records

The records article covers bookkeeping and each member's right to inspect the company's books:

• Records kept: financial statements, tax returns and the member list.
• Location: where the books are kept, usually the principal place of business.
• Inspection rights: how members see and copy the books, and any reasonable limits on that right. An agreement may not unreasonably restrict that right in Texas, Illinois, Hawaii or Montana (Tex. Bus. Orgs. Code § 101.054; 805 ILCS 180/15-5; Haw. Rev. Stat. 428-103(b); Mont. Code Ann. § 35-8-109).

Member meetings

The meetings article sets how members meet and decide:

• Frequency: how often members meet, such as once a year, or only when needed.
• Regular and special meetings: when regular meetings take place and who can call a special one.
• Written notice: how far ahead and in what form members are told of a meeting.
• Quorum: the share of members or votes that must be present to hold a meeting.
• Decisions: the vote needed to pass a decision at a meeting.
• Action without a meeting: whether members can act by written consent instead.

Transfers and admission of new members

The transfer article controls who can buy into the company and how:

• Transfer limits: whether a member can sell or pledge an interest, and with whose consent.
• Right of first refusal: existing members can buy a departing member's interest before an outsider can.
• Admission: the vote or consent needed to admit a new member.
• Form of consent: written, electronic or unanimous consent for these decisions.

Withdrawal, death and disability

The withdrawal article states what happens to a member's interest when the member leaves, dies or becomes disabled:

• Continuation: whether the LLC continues, and who holds the departing member's interest.
• Buyout: how the interest is valued and paid for.
• Termination: when such an event ends the company instead, and how its assets are divided.

Dissolution and winding up

The dissolution article lists the events that end the company and the order of payments after it ends:

• Causes: a vote of the members, the sale of all assets, the loss of the last member, or another listed event.
• Distribution of assets: creditors are paid first, then members by their capital accounts or percentages.
• Winding up: who closes the books, sells assets and sends final notices.

Amendments

The amendment article sets who approves a change, such as all members or a set majority, and that the approval is in writing. It also states how a change is proposed and whether a meeting or notice period comes first.

Boilerplate Clauses in an Operating Agreement

Boilerplate clauses are the standard closing provisions that appear in almost every agreement of this kind and control how the rest of it is read. A boilerplate LLC operating agreement is one built mostly from these standard terms, with the business terms filled in.

• Governing law: the state whose law interprets the agreement and settles disputes over it. In California and Florida, for example, an operating agreement may not vary the law that the LLC act itself makes applicable (Cal. Corp. Code § 17701.10; Fla. Stat. § 605.0105).
• Severability: if one provision is unenforceable, the rest stay in effect.
• Entire agreement: the agreement replaces earlier written or spoken deals among the members.
• Headings: section titles are for reference only and do not change the terms.
• Binding effect: the agreement binds and benefits the members' heirs, executors, successors and assigns.
• Notices: how members send formal notices to each other and to the company.
• Counterparts: members can sign separate copies that together form one agreement.

What Happens If an LLC Has No Operating Agreement?

A missing operating agreement generally leaves the LLC on the default rules of its state's LLC act. Florida, California and Texas each say their act governs a matter where the agreement does not provide for it (Fla. Stat. § 605.0105(2); Cal. Corp. Code § 17701.10(b); Tex. Bus. Orgs. Code § 101.052).

The acts differ on whether an LLC has to adopt an agreement at all. The Missouri act says the member or members "shall adopt an operating agreement" (Mo. Rev. Stat. § 347.081), while a Nevada company "may, but is not required to, adopt an operating agreement" (Nev. Rev. Stat. § 86.286). In Maine, a filed certificate of formation and one or more members are conclusive evidence that a limited liability company agreement exists (Me. Rev. Stat. tit. 31, § 1502).

Some of those default rules, as the acts state them:

• Unless the operating agreement provides otherwise, a New Hampshire LLC is managed by its members (N.H. Rev. Stat. Ann. § 304-C:47).
• Unless the operating agreement provides otherwise, management of a Massachusetts LLC is vested in its members (Mass. Gen. Laws ch. 156C, s. 24(a)).
• An Iowa LLC is member-managed unless the operating agreement provides otherwise (Iowa Code § 489.407(1)).
• If neither the articles of organization nor an operating agreement provide for allocation, a New Mexico LLC splits profits and losses in proportion to each member's capital contributions, adjusted for withdrawals (N.M. Stat. Ann. 53-19-22).

A default rule may not match what the members meant. Profits split by capital contributions, for example, ignore a member who contributed work instead of money. A written agreement replaces these defaults with the members' own terms, within the limits of the state's LLC act.

The articles of organization can decide the management question. Alaska members manage the company except as its articles of organization provide otherwise (Alaska Stat. 10.50.110(a)). Louisiana members manage it except as the articles provide otherwise, subject to any provision in a written operating agreement restricting or enlarging a member's management rights and duties (La. Rev. Stat. § 12:1311). If the articles of organization and the operating agreement of a Michigan LLC conflict, the articles control (Mich. Comp. Laws § 450.4214).

How to Draft and Sign an LLC Operating Agreement

An LLC operating agreement is drafted after the members agree on ownership, management and money. In Colorado, an agreement entered into before, after or at the filing of the articles of organization may be made effective as of the company's formation or as of the time or date the agreement provides (Colo. Rev. Stat. § 7-80-108). These steps follow the order of a typical agreement:

1. Enter the company's exact name, its state of formation, its principal address and its registered agent, as they appear in the articles of organization.
2. List each member with an address, the contribution made and the ownership percentage or number of units.
3. Choose member management or manager management, check the choice against the articles of organization, and name any managers.
4. Set the voting rule and any decisions that need a supermajority or unanimous vote.
5. Set how profits, losses and cash distributions are divided.
6. Write the rules for transfers, buyouts, withdrawal, death and disability.
7. Add the dissolution, amendment and boilerplate clauses.
8. Have every member review, sign and date the agreement, then give each member a copy and keep the original with the company's papers.

When to sign it

The agreement can come before or after the articles of organization. In Colorado it may be entered into before, after, or at the time the articles are filed, and made effective from formation or a later date it names (Colo. Rev. Stat. § 7-80-108). In New York, 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).

Who signs it

The agreement is best signed by every member and by any manager it names, though in some states signing is not what binds them. A person who becomes a member of a Connecticut or Wisconsin LLC is deemed to assent to the operating agreement (Conn. Gen. Stat. § 34-243e; Wis. Stat. § 183.0106). In Kansas and Delaware, a member, manager or assignee is bound by the operating agreement whether or not that person signs it (Kan. Stat. Ann. § 17-7663; 6 Del. C. § 18-101).

How to change it

The agreement changes by amendment, approved as its amendment article says. In Texas, each member must consent to an amendment when the company agreement sets no other rule (Tex. Bus. Orgs. Code § 101.053). The Texas company agreement governs the company's internal affairs except for the provisions listed in Tex. Bus. Orgs. Code § 101.054, and that list does not include Tex. Bus. Orgs. Code § 101.053. In Connecticut, the agreement may make an amendment depend on the approval of a person who is not a party, or on a condition, and an amendment is ineffective if its adoption lacks that approval or condition (Conn. Gen. Stat. § 34-243f).

Where to Find an LLC Operating Agreement

An LLC operating agreement is kept with the company's own books, usually at its principal office, not with a state agency. Several LLC acts name the place:

• A Rhode Island LLC keeps a copy of any written operating agreement at its principal office (R.I. Gen. Laws § 7-16-22(a)).
• An Indiana LLC keeps at its principal office copies of any written operating agreements, their amendments, and agreements no longer in effect (Ind. Code § 23-18-4-8(a)).
• A Kentucky LLC keeps its records at its principal office, unless a written operating agreement names another location (Ky. Rev. Stat. § 275.185(1)).

To find a lost agreement, ask the other members, the manager, or the lawyer or accountant who formed the company. A state's business database holds the articles of organization, not the operating agreement. If no copy turns up, the members can sign a new agreement that confirms their current terms.

How to Set Up an LLC

Forming an LLC takes eight steps, from choosing a state to writing the operating agreement. Forms, fees, and timing differ by state, so check your state's filing office before you start. The steps below follow the usual order:

1. Choose the state of formation.
2. Select the company name.
3. Appoint a registered agent.
4. Decide the ownership.
5. File the articles of organization.
6. Pay the filing fee.
7. Get an Employer Identification Number.
8. Sign the operating agreement.

1. Choose the state of incorporation

Many owners form the LLC in the state where the business operates. That is usually the simplest choice for a local business serving a specific community.

Some owners pick another state for its tax or filing rules. If you do, check that state's rules and whether you also need to register in the state where you operate.

Registered agents are often available through professional services.

2. Select the name of your business entity

The company name shapes how customers see the business. A good name is short, easy to remember, and tied to what the company does. Most states also require the name to include "Limited Liability Company," "LLC," or another approved abbreviation.

The name usually needs to differ from names already on file with the state. Generic names such as "[State] [Niche] LLC" are often taken. Search your state's Secretary of State business database before you file.

Many states let you reserve a name for a limited time before you file. The fee and the length of the reservation depend on the state.

Check that a matching domain name is available before you settle on a name, so your website and your company match.

3. Select an agent for your business

A registered agent receives legal notices for the company. Most states ask for the agent's name and address in the articles of organization, and it helps to record the same details in the operating agreement.

The agent can be a member of the LLC, another individual, or a professional service. In a single-member LLC, you may be able to act as your own agent if your state allows it.

Acting as your own agent has drawbacks. Your name and address may become public, and you need a physical address in the state where the LLC is formed.

A registered agent usually needs a physical street address in the state. A PO box typically does not qualify.

4. Determine the ownership

Ownership shares are called units, and each member's units show that member's percentage of the company. The percentage changes if new members join.

Ownership has two parts. The economic interest decides how much profit a member receives. The management interest decides how much voting power a member has.

An LLC can generally have as many members as its owners want, and most states allow a company with only one member. Keeping the number of members small makes the company easier to manage.

Also choose an authorized representative who can act for the LLC, for example to open a bank account. Settle ownership before you file the articles of organization, so each member's percentage and role are clear from the start.

5. File the articles of organization

After you set the ownership structure and pick a registered agent, file the articles of organization with the state. Most states accept filings by mail or online through the Secretary of State's office or a similar filing office.

Your state's form sets the exact list of details it asks for. When you complete the articles of organization, most forms ask for items like these:

• The LLC's name, and its place of business and mailing address (which can be the same)
• The name and physical address of the registered agent
• The names of the LLC members or authorized representatives
• An email address for correspondence with the LLC, if the form asks for one

6. Pay the filing fee

Filing the articles of organization usually comes with a filing fee. The amount differs by state and can change, so check your state's current fee before you submit. Most states accept payment online or by check.

After the filing office receives your payment and approves the filing, your LLC is recognized as a separate legal entity. How long approval takes depends on the state and how you file.

7. Get an Employer Identification Number

An Employer Identification Number (EIN) is the IRS number that identifies your business. Many banks ask for one when you open a business account, and you need one to hire employees or file certain tax returns.

The IRS issues an EIN through its online application or on a paper application sent by mail. Apply soon after the LLC is formed, so the bank account and tax filings are ready when the company starts doing business.

8. Create an operating agreement

Once your LLC is registered, create the operating agreement. It is usually not filed with a government agency. The company keeps it with its internal records.

The agreement is usually the document that records each member's ownership percentage. Even where state law does not require a written agreement, having one is good practice. The clauses to include and the signing steps are in the drafting section above.

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Sample Operating Agreement

The sample below is an example LLC operating agreement for a company with two members. It has articles for formation, membership, management, money, transfers, dissolution, indemnification, amendments, and notices. Replace each bracketed item with your own details and adapt each clause to your state and company before you sign.

The sample's articles, in order:

• Formation: name, purpose and principal place of business
• Membership: members, interests and capital contributions
• Management and voting
• Allocations and distributions
• Transfers and withdrawals
• Dissolution and winding up
• Indemnification, amendments and general terms

LLC vs. Sole Proprietorship

A single-member LLC differs from a sole proprietorship in liability, banking, naming and taxes. Both are simple to run for one owner.

• Liability: In an LLC, owners are generally not personally liable for the company's debts. In a sole proprietorship, personal and business liability are the same, so creditors can reach the owner's personal assets, such as a home or car.
• Bank accounts: A sole proprietor can mix personal and business funds. LLC owners should keep business money in a separate account.
• Business name: An LLC's name is registered with the state and shows the business structure. A sole proprietor can operate under the owner's own name, or register a DBA (doing business as) name to use a different one.
• Taxes: By default, both are pass-through, so profits are taxed once on the owner's personal return. An LLC can also elect to be taxed as a corporation. A sole proprietorship has only one tax treatment.

Frequently Asked Questions

Can I write my own operating agreement?

Yes, members can write their own operating agreement. The agreement is a private contract among the members, so they choose its terms within the limits of their state's LLC act. A lawyer's review helps most when the company has several owners, outside investors or profits interests.

How do I make a simple operating agreement for an LLC?

A simple agreement names the company and its members, states each member's percentage and contribution, picks member or manager management, and sets how profits are split. It then adds rules for transfers, dissolution and amendments. The sample above has that shape.

Is an operating agreement filed with the state?

No, the agreement usually stays with the company. It is usually not filed with a government agency. The articles of organization are the document filed to form the LLC.

Does an operating agreement need to be renewed every year?

An operating agreement does not expire each year. It stays in force for the duration it sets, until the members amend, restate or end it. A yearly report to the state, where one applies, is a separate filing and does not contain the agreement.

Does a single-member LLC need an operating agreement?

A single-member LLC gains from a written agreement even where its state accepts an oral one. The written document shows that the owner runs the company apart from personal affairs, and banks often ask for it. In the case of a one-member Louisiana LLC, the act defines the operating agreement as a written agreement between the member and the company (La. R.S. 12:1301(A)(16)). The Missouri act says the member or members "shall adopt an operating agreement" (Mo. Rev. Stat. § 347.081), while a Nevada company "may, but is not required to" adopt one (Nev. Rev. Stat. § 86.286).

Can an operating agreement give one member more votes than profits?

Yes. The agreement can separate the economic interest from the management interest, so a member's share of profits and share of votes differ. The equity and voting articles state both.

General information, not legal or tax advice.

Jennifer M. Settles

Author & Attorney

With over 25 years of experience as a business and transactional attorney, Jennifer has mastered the craft of closing highly successful deals for her clients. Through her wide-ranging expertise in commercial contracts, real estate transactions, M&A and corporate law, Jennifer secures results that are second-to-none.