An operating agreement is the internal rulebook for your LLC — who owns what, who decides what, and what happens if things change. Most states don’t technically require one. Every serious LLC has one anyway.
Think of it as your LLC’s constitution.
An operating agreement is a written contract between the owners (members) of an LLC that spells out how the business is run. It covers ownership percentages, voting rights, how profits and losses are distributed, what happens if a member leaves or dies, how to add new members, and dozens of small rules that — in the absence of the agreement — would be decided by your state’s default LLC statute. Those defaults are written for the average case. You are not the average case.
Operating agreements are internal documents. You don’t file them with the state, and in almost every state nobody else ever sees them. They’re between you and your fellow members (or, for a single-member LLC, between you and future-you).
A small number of states legally require LLCs to adopt an operating agreement. Most do not. Either way, we’d strongly recommend one.
These states mandate an operating agreement by statute:
California Delaware Maine Missouri New York
In the other 45 states, you’re not breaking the law by skipping the agreement — but you’re just agreeing to whatever the state’s default LLC statute says. For any LLC with more than one member, that’s a recipe for disputes. For a single-member LLC, it’s a missed opportunity to reinforce the liability shield.
Even in the states that do require one, nobody at the Secretary of State is asking for a copy. The requirement lives in the LLC statute, and courts enforce it when disputes come up. Not filing one doesn’t void your LLC — it just means you’re operating against your own state’s law.
The agreements look very different depending on how many owners there are.
Short and structural. You don’t have voting disputes to resolve, because you’re the only vote. The goal is to document that the LLC is a real, separate entity: who the member is, what capital they contributed, who manages day-to-day operations, and how the LLC will be dissolved. A solid single-member operating agreement is 4–8 pages.
Free templates from reputable sources (SBA, state bar associations) are usually fine here, and we include a plain-English template with every $49 filing.
Much more detailed, because there’s real stuff to negotiate. Ownership percentages, capital contributions, profit distributions, voting thresholds, transfer restrictions, drag-along and tag-along rights, buy-sell provisions, dispute-resolution procedures, and — importantly — what happens if someone wants out. A well-drafted multi-member agreement is 15–40 pages.
This is where we’d push you toward a lawyer, especially if you have more than two members, uneven ownership splits, or outside investors. A template is a starting point, not a substitute.
The standard components, in roughly the order they appear in a typical agreement.
No. In almost every state, the operating agreement stays internal. You keep a signed copy with your LLC records. The state only wants the Articles of Organization.
Yes, and many people do. For simple single-member LLCs, a solid template you fill in is perfectly reasonable. For multi-member LLCs with anything unusual — uneven splits, outside money, vesting — we’d have a lawyer review it. An operating agreement is cheap if it prevents one dispute.
In a member-managed LLC, every member has authority to act on the company’s behalf — sign contracts, open accounts, commit funds. In a manager-managed LLC, only appointed managers have that authority, and members are more like passive owners. Most small LLCs are member-managed. Pick manager-managed when you have passive investors or want to limit day-to-day authority to a smaller group.
In almost every state, no. A signed agreement is enforceable. Notarization is occasionally required for amendments involving real estate or specific filings, but the base agreement itself doesn’t need it.
Any time something real changes — new member, new capital contribution, change in ownership percentages, change in management. Also worth a once-a-year glance even if nothing changed.
You can, but don’t. Without an operating agreement you’re operating under your state’s default LLC statute, which probably doesn’t match what you and your partners actually want. And if you’re ever sued, the absence of an agreement is evidence that your LLC isn’t really a separate entity.
Flat $49, plus whatever your state charges. No upsells, no surprises.