Simple LLC operating agreement

Fill in a plain operating agreement for an LLC with one owner or several. Choose your state, list the owners, and print a clean copy for everyone to sign.

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What an operating agreement is

An operating agreement is the LLC's own rulebook. It says who owns what, who runs the company, how money comes out, and what happens if an owner leaves or dies. You keep it with your company records. You usually do not file it with the state.

When you need one

When you form an LLC, even with one owner. It backs up the separation between you and the company.
When a bank opens a business account or a lender reviews your company. Many ask to see it.
When a new owner joins or someone wants out.

What to include

The company name exactly as filed, and the state.
Each owner's contribution and ownership percentage, adding to 100%.
Who runs the business, and which decisions need more than one vote.
What happens when an owner dies, leaves, or wants to sell.

What the form asks for

The company: How many owners; Company name, as filed with the state; State where it is formed; Date this agreement starts; Date the state filed the formation document; Main business address; City; State; ZIP; What the company does.
Owners (members): Name; Address; Put in at the start; Ownership.
Who runs it: Management; Manager's name; Big decisions need; Bank for the company's account.

The wording on the printed document

Formation. The Company was formed by filing its formation document with the ________ filing office on ________. Its main address is ________, ________, ________ ________. It keeps its registered agent and registered office as the state requires, and may change them by filing with the state.

Purpose. The Company may carry on ________, and do anything the law allows that supports it.

Term. The Company continues until it is dissolved under this Agreement or by law.

Limited liability. No Member or manager is personally responsible for the Company's debts just for being a Member or manager, except as the law requires or as that person agrees in writing, such as by a personal guarantee.

Contributions. Each Member has put in what is stated above. No Member has to put in more unless every Member agrees in writing.

Sole member. The Member owns 100% of the Company, receives all of its profits and losses, and decides when to take money out, as long as the Company can still pay its debts when they come due.

Profits and distributions. Profits and losses are shared by ownership percentage. The Company pays distributions, by ownership percentage, when the Members decide to, as long as it can still pay its debts when they come due.

Management. The Member runs the Company and may sign for it.

Management. The Members run the Company. Any Member may sign for it in the ordinary course of business. Ordinary decisions need Members holding over half of the ownership.

Management. ________ (the Manager) runs the day-to-day business and may sign for the Company in the ordinary course of business. The Member or Members may replace the Manager, by the vote needed for big decisions.

Big decisions. These need the approval of ________: selling substantially all the Company's assets, merging, taking on debt outside the ordinary course of business, admitting a new Member, changing this Agreement, and dissolving the Company.

Votes. Members vote by ownership percentage. A decision may be made at a meeting or in writing, including by email.

Money and records. The Company keeps its money in its own account, separate from any Member's, and keeps accurate books. Its tax year is the calendar year unless the law requires otherwise. Each Member may read the books on reasonable notice.

Tax treatment. Unless the Member chooses otherwise, the Company is treated as a disregarded entity for federal income tax.

Tax treatment. Unless the Members choose otherwise, the Company is treated as a partnership for federal income tax.

Transfers. The Member may transfer any or all of the Member's interest. If the Member dies, the Member's estate or heirs may continue the Company.

Transfers. A Member may not transfer an interest without the written approval of the other Members. If a Member dies or leaves, the remaining Members decide within 90 days whether the Company buys that interest at a fair value they agree on, or continues with the Member's successor holding only the right to distributions.

Dissolution. The Company dissolves when the Member or Members decide to, or as the law requires. It then pays its debts, and anything left goes to the Member or Members by ownership percentage.

Protection. The Company covers a Member or manager for losses from acting in good faith for the Company, to the extent the law allows and not for fraud or willful misconduct.

General. This is the whole agreement among the Members about the Company. Changes must be in writing and signed by the Members. If a part cannot be enforced, the rest stands. This Agreement is governed by ________.

This is a general template, not legal advice. Check with an attorney for your situation.

LLC operating agreements by state

Alabama · Alaska · Arizona · Arkansas · California · Colorado · Connecticut · Delaware · District of Columbia · Florida · Georgia · Hawaii · Idaho · Illinois · Indiana · Iowa · Kansas · Kentucky · Louisiana · Maine · Maryland · Massachusetts · Michigan · Minnesota · Mississippi · Missouri · Montana · Nebraska · Nevada · New Hampshire · New Jersey · New York · North Carolina · North Dakota · Ohio · Oklahoma · Oregon · Pennsylvania · Rhode Island · South Carolina · South Dakota · Tennessee · Texas · Utah · Vermont · Virginia · Washington · West Virginia · Wisconsin · Wyoming

Common questions

Does my LLC need an operating agreement?
It depends on the state. Few states flatly require one, but most lenders and banks want to see it, and without one the state's default rules decide things for you. Your state's page below shows what its law says.

Do I need one if I am the only owner?
It is still worth having. It helps show the company is separate from you, which matters if someone tries to hold you personally responsible for its debts. It also shows a bank who can sign for the company.

Do I file it with the state?
Usually not. You file articles of organization or a similar document with the state. The operating agreement stays with your company records. Your state's page shows what you do file and what it costs.

Is this form right for a complicated company?
It is meant for simple LLCs with a small number of owners. If you have investors, different classes of owners, or a plan for profit splits that do not follow ownership, have an attorney write yours.

What if our percentages change later?
Change the agreement in writing, signed by the members. Fill in a new one here with the new numbers and a new date, and keep it with your records.

Buying equipment and need financing? Apply here.