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LLC Operating Agreement Template

Business and Legal Professional Resource

Draft an LLC operating agreement with a template covering members and ownership percentages, capital contributions, allocations and distributions, management (member-managed or manager-managed), voting, transfer restrictions, buy-sell events, and dissolution. Even single-member LLCs benefit from a written agreement for banks and liability hygiene. For founders and business counsel. This is not legal advice; default state LLC acts fill gaps differently, and tax elections (partnership versus S corporation) must match the agreement—confirm current state law and have counsel review before members sign.

LLC Operating Agreement Template form template preview

Key Benefits

Record members, units, and capital contributions
Choose member-managed or manager-managed governance
Set voting thresholds for ordinary and major decisions
Restrict transfers and define buy-sell triggers
Align allocations with the intended tax treatment
Give banks and new members a signed governing document

Common Use Cases

Multi-member LLCs documenting ownership at formationSingle-member LLCs opening a business bank accountCounsel converting a handshake deal into a signed agreementMembers adding a manager or new investorBuy-sell planning for death, disability, or departureS-corp election follow-up that needs matching distribution rules

Frequently Asked Questions

Do I need an operating agreement if the state does not require one?
Most states do not file the operating agreement, but banks, investors, and courts look for one. Without it, the default LLC act controls voting, distributions, and transfers—often not what the founders intended. A signed agreement is cheap insurance even for a single member.
What is the difference between member-managed and manager-managed?
Member-managed means the owners run day-to-day affairs. Manager-managed vests that authority in one or more managers (who may or may not be members), which is common when investors want a smaller control group. The articles and the agreement should say the same thing.
Should tax allocations match ownership percentages?
Often yes for a simple LLC taxed as a partnership, but special allocations need substantial-economic-effect discipline. If you elect S corporation taxation, distribution rules must stay consistent with stock-like ownership. Have a tax advisor read the allocation article.
Is this template legal advice?
No. State LLC acts, securities rules for adding members, and tax elections are fact-specific. Customize and have licensed counsel review before signature.

Checklist

Members

Member legal names, addresses, units or percentages, and initial capital
Required

Attach a schedule that you can amend when ownership changes. Match capital to bank deposits.

Management

Member-managed or manager-managed designation and named managers if any
Required

Must agree with the articles of organization. Describe officer titles if you use them.

Voting

Voting percentages and a list of major decisions that need a supermajority
Required

Typical major decisions: new debt, new members, sale of the company, and amendment of the agreement.

Economics

Allocation and distribution rules, including tax-distribution language if used
Required

State whether cash is required to cover allocated tax. Flag any S-corp election.

Transfers

Transfer restrictions, right of first refusal, and permitted transfers to affiliates
Required

Note securities-law legends if you will have more than a few members.

Buy-sell triggers: death, disability, divorce, bankruptcy, or voluntary exit
Required

Include a valuation method or appraisal process. Name who must buy and on what timeline.

Legal

Fiduciary-duty and exculpation or indemnification clauses allowed by state law

Some states let you narrow duties; others do not. Do not copy another state's language blindly.

Execution

Signature pages and an attached membership schedule
Required

Every member should sign. Store with the articles and EIN letter.