LLC Operating Agreement

Define your LLC's structure and protect your business with a legally binding operating agreement.

What Is an LLC Operating Agreement?

An LLC Operating Agreement is a legal document that outlines the ownership structure, member roles, voting rights, profit and loss distribution, and management procedures of a Limited Liability Company. While not required in every state, having one is strongly recommended to establish clear rules, prevent disputes, and protect members' limited liability.

What Should Be Included

Member names, contributions, and ownership percentages

Profit and loss distribution rules

Management structure (member-managed vs manager-managed)

Voting rights and decision-making procedures

Rules for adding or removing members

Buy-sell provisions and transfer restrictions

Dissolution procedures

Amendment procedures

Why You Need an Operating Agreement

Even in states that don't legally require one, an LLC Operating Agreement is critical. Without one, your LLC defaults to state rules, which may not align with your members' intentions. An operating agreement:

Protects your limited liability status in court
Prevents costly disputes between members
Defines clear management and financial procedures
Demonstrates your LLC is a separate entity from its owners
May be required by banks, investors, and partners

Is an LLC Operating Agreement Required by Law?

Requirements vary by state. New York, California, Maine, Missouri, and Delaware legally require an LLC Operating Agreement. However, even in states where it's optional, creating one is highly recommended. Banks and investors often require it, and it provides essential legal protection for all members.

Create Your LLC Operating Agreement

Use our guided questionnaire to build a state-specific LLC Operating Agreement in minutes.

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