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An operating agreement is one of the most important documents for your LLC — yet many business owners skip it entirely, either because they do not know they need one or because hiring an attorney to draft one feels too expensive. The good news is that for straightforward LLCs, a well-written template can cover everything you need.
Below you will find two free, ready-to-use LLC operating agreement templates: one for single-member LLCs and one for multi-member LLCs. We also walk you through each section so you understand exactly what you are agreeing to and how to customize the templates for your situation.
Key Takeaways
- An operating agreement defines your LLC’s ownership, management, and operating rules. Even if your state does not legally require one, you should always have one.
- Five states explicitly require an operating agreement: California, New York, Maine, Missouri, and Delaware.
- We provide two free templates below: one for single-member LLCs and one for multi-member LLCs.
- The operating agreement is an internal document — you do NOT file it with the state. Keep it with your LLC records.
- For complex situations (multiple owners with unequal contributions, special profit allocations, or significant assets), consider having an attorney review your agreement.
Why You Need an LLC Operating Agreement
An LLC operating agreement is a legal document that outlines how your LLC will be owned, managed, and operated. It covers ownership percentages, profit and loss distribution, voting rights, management structure, and what happens if a member wants to leave or the LLC needs to be dissolved.
Here are the key reasons every LLC should have one:
1. Protect Your Limited Liability
Courts are more likely to “pierce the LLC veil” (hold you personally liable for business debts) if your LLC lacks basic formalities. An operating agreement is one of the strongest pieces of evidence that your LLC is a legitimate, separate entity from you personally. Without one, a creditor could argue that your LLC is not truly separate from your personal affairs.
2. Prevent Disputes
If you have business partners, an operating agreement is essential. Without written rules governing profit distribution, decision-making authority, and exit procedures, even the best friendships can turn into bitter legal disputes. The agreement puts everything in writing before disagreements arise.
3. Override Default State Rules
If your LLC does not have an operating agreement, your state’s default LLC laws apply — and those defaults may not match what you want. For example, many states default to equal profit splitting regardless of capital contributions. If you contributed 80% of the startup capital and your partner contributed 20%, the state default might split profits 50/50 unless your operating agreement says otherwise.
4. Bank and Creditor Requirements
Banks almost always ask for a copy of your operating agreement when you open a business bank account or apply for a business loan. Without one, you may have difficulty accessing basic financial services for your LLC.
5. Legal Requirement in Some States
Five states explicitly require LLCs to have an operating agreement: California, Delaware, Maine, Missouri, and New York. Even in states that do not require one, the benefits are compelling enough that every LLC should have this document.
Free Single-Member LLC Operating Agreement Template
This template is designed for single-member LLCs (one owner). Copy the text below, fill in the bracketed fields, and customize as needed for your situation.
OPERATING AGREEMENT
OF
[LLC NAME]
A [STATE] Limited Liability Company
Effective Date: [DATE]
ARTICLE I — FORMATION
1.1 Name. The name of the Limited Liability Company is [LLC NAME] (the “Company”).
1.2 State of Formation. The Company was formed in the State of [STATE] by filing Articles of Organization with the Secretary of State on [FILING DATE].
1.3 Registered Agent. The registered agent of the Company is [REGISTERED AGENT NAME], with a registered office at [REGISTERED AGENT ADDRESS].
1.4 Principal Office. The principal office of the Company is located at [BUSINESS ADDRESS]. The Member may change the principal office at any time.
1.5 Purpose. The Company is formed for the purpose of [BUSINESS PURPOSE, e.g., “conducting any and all lawful business activities permitted under the laws of the State of (STATE)”].
1.6 Duration. The Company shall exist in perpetuity unless dissolved in accordance with this Agreement or by operation of law.
ARTICLE II — MEMBER
2.1 Sole Member. The sole member of the Company is:
Name: [MEMBER FULL LEGAL NAME]
Address: [MEMBER ADDRESS]
Capital Contribution: $[AMOUNT]
Membership Interest: 100%
2.2 Additional Members. No additional members shall be admitted to the Company without the written consent of the sole Member and an amendment to this Agreement.
ARTICLE III — MANAGEMENT
3.1 Member-Managed. The Company shall be managed by its sole Member, who shall have full and exclusive authority to manage the business and affairs of the Company.
3.2 Powers. The Member shall have the power to: (a) enter into contracts and agreements on behalf of the Company; (b) open and manage bank accounts; (c) hire employees and independent contractors; (d) acquire, hold, and dispose of property; (e) borrow money and grant security interests; and (f) take any other action necessary for the conduct of the Company’s business.
3.3 Banking. The Member is authorized to open accounts at any financial institution in the Company’s name and to designate authorized signers.
ARTICLE IV — CAPITAL AND DISTRIBUTIONS
4.1 Initial Contribution. The Member has contributed the amount set forth in Article II as the initial capital contribution to the Company.
4.2 Additional Contributions. The Member is not required to make additional capital contributions but may do so at any time.
4.3 Distributions. The Member may receive distributions from the Company at any time and in any amount, subject to applicable law and the Company’s obligation to maintain adequate reserves for its liabilities and operations.
4.4 Fiscal Year. The fiscal year of the Company shall be the calendar year.
ARTICLE V — TAXES
5.1 Tax Treatment. The Company shall be treated as a disregarded entity for federal income tax purposes, unless the Member elects otherwise by filing the appropriate form with the Internal Revenue Service.
5.2 Tax Responsibility. The Member shall be responsible for all tax obligations arising from the Company’s operations, including income tax, self-employment tax, and any applicable state taxes.
ARTICLE VI — DISSOLUTION
6.1 Events of Dissolution. The Company shall be dissolved upon: (a) the written decision of the Member to dissolve the Company; (b) the death or legal incapacity of the Member, unless a successor is designated in the Member’s estate plan; or (c) any event that makes it unlawful to continue the Company’s business.
6.2 Winding Up. Upon dissolution, the Member (or the Member’s legal representative) shall wind up the Company’s affairs by: (a) paying all debts and liabilities; (b) distributing remaining assets to the Member; and (c) filing Articles of Dissolution with the Secretary of State.
ARTICLE VII — GENERAL PROVISIONS
7.1 Amendments. This Agreement may be amended only by a written instrument signed by the Member.
7.2 Governing Law. This Agreement shall be governed by the laws of the State of [STATE].
7.3 Severability. If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall continue in full force and effect.
7.4 Entire Agreement. This Agreement constitutes the entire agreement of the Member with respect to the Company and supersedes all prior agreements, oral or written.
IN WITNESS WHEREOF, the undersigned Member has executed this Operating Agreement as of the Effective Date written above.
______________________________________
[MEMBER FULL LEGAL NAME], Sole Member
Date: _______________
Free Multi-Member LLC Operating Agreement Template
This template is designed for LLCs with two or more members. It includes provisions for profit allocation, voting rights, transfer restrictions, and dispute resolution that are not needed in a single-member agreement.
OPERATING AGREEMENT
OF
[LLC NAME]
A [STATE] Limited Liability Company
Effective Date: [DATE]
ARTICLE I — FORMATION
1.1 Name. The name of the Limited Liability Company is [LLC NAME] (the “Company”).
1.2 State of Formation. The Company was formed in the State of [STATE] by filing Articles of Organization with the Secretary of State on [FILING DATE].
1.3 Registered Agent. The registered agent of the Company is [REGISTERED AGENT NAME], located at [REGISTERED AGENT ADDRESS].
1.4 Principal Office. The principal office of the Company is located at [BUSINESS ADDRESS]. The principal office may be changed by a majority vote of the Members.
1.5 Purpose. The Company is formed for the purpose of [BUSINESS PURPOSE, e.g., “conducting any and all lawful business activities”].
1.6 Duration. The Company shall exist in perpetuity unless dissolved in accordance with this Agreement or by operation of law.
ARTICLE II — MEMBERS AND CAPITAL CONTRIBUTIONS
2.1 Members. The Members of the Company, their capital contributions, and their membership interests are as follows:
| Member Name | Address | Capital Contribution | Membership Interest (%) |
|---|---|---|---|
| [Member 1 Name] | [Address] | $[Amount] | [XX]% |
| [Member 2 Name] | [Address] | $[Amount] | [XX]% |
2.2 Additional Contributions. No Member shall be required to make additional capital contributions beyond their initial contribution. Additional contributions may be made only with the unanimous consent of all Members.
ARTICLE III — PROFITS, LOSSES, AND DISTRIBUTIONS
3.1 Allocation. Profits and losses of the Company shall be allocated among the Members in proportion to their respective Membership Interest percentages, unless unanimously agreed otherwise in writing.
3.2 Distributions. Distributions shall be made at such times and in such amounts as determined by a majority vote of the Members, in proportion to their Membership Interest percentages. The Company shall maintain adequate reserves before making distributions.
3.3 Fiscal Year. The fiscal year of the Company shall be the calendar year.
ARTICLE IV — MANAGEMENT
4.1 Management Structure. The Company shall be [MEMBER-MANAGED / MANAGER-MANAGED]. [Choose one. If manager-managed, add: “The initial Manager(s) shall be: (NAME(S)).”]
4.2 Voting. Each Member shall have voting rights in proportion to their Membership Interest percentage. Except as otherwise provided in this Agreement, decisions shall be made by a majority vote of the Membership Interests.
4.3 Unanimous Consent Required. The following actions shall require the unanimous consent of all Members: (a) amending this Operating Agreement; (b) admitting a new Member; (c) selling all or substantially all of the Company’s assets; (d) merging or converting the Company; (e) dissolving the Company; (f) incurring debt exceeding $[AMOUNT].
4.4 Banking. The Members shall designate one or more Members or Managers as authorized signers on the Company’s bank accounts.
ARTICLE V — TRANSFER OF MEMBERSHIP INTERESTS
5.1 Restrictions on Transfer. No Member may sell, assign, transfer, or pledge their Membership Interest without first offering it to the other Members under the Right of First Refusal set forth below.
5.2 Right of First Refusal. A Member wishing to transfer their interest (the “Selling Member”) shall provide written notice to all other Members, including the proposed price and terms. The remaining Members shall have 30 days to purchase the interest on the same terms. If multiple Members wish to purchase, they may do so in proportion to their existing Membership Interests.
5.3 Admission of Transferee. A transferee of a Membership Interest shall not become a Member of the Company without the unanimous consent of the remaining Members.
ARTICLE VI — WITHDRAWAL AND BUYOUT
6.1 Voluntary Withdrawal. A Member may withdraw from the Company by providing [60/90/180] days written notice to all other Members.
6.2 Buyout Price. Upon withdrawal, the withdrawing Member’s interest shall be purchased by the remaining Members (or the Company) at fair market value, determined by: (a) mutual agreement; or (b) if the parties cannot agree, an independent appraisal by a certified business appraiser selected by the Members.
6.3 Payment Terms. The buyout price shall be paid within [90/180/365] days of the withdrawal date, either as a lump sum or in equal monthly installments with interest at [X]% per annum.
ARTICLE VII — DISSOLUTION
7.1 Events of Dissolution. The Company shall be dissolved upon: (a) the unanimous written consent of all Members; (b) a judicial decree of dissolution; or (c) any event that makes it unlawful to continue the Company’s business.
7.2 Winding Up. Upon dissolution, the Members shall: (a) pay all debts and liabilities of the Company; (b) set aside reserves for any contingent or unforeseen liabilities; and (c) distribute remaining assets to the Members in proportion to their Membership Interest percentages.
ARTICLE VIII — DISPUTE RESOLUTION
8.1 Mediation. Any dispute arising under this Agreement shall first be submitted to mediation, with a mediator mutually agreed upon by the disputing parties. The cost of mediation shall be shared equally.
8.2 Arbitration. If mediation does not resolve the dispute within 60 days, the dispute shall be resolved by binding arbitration in accordance with the rules of the American Arbitration Association, conducted in [CITY, STATE]. The arbitrator’s decision shall be final and enforceable in any court of competent jurisdiction.
ARTICLE IX — GENERAL PROVISIONS
9.1 Amendments. This Agreement may be amended only by a written instrument signed by all Members.
9.2 Governing Law. This Agreement shall be governed by the laws of the State of [STATE].
9.3 Severability. If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall continue in full force and effect.
9.4 Entire Agreement. This Agreement constitutes the entire agreement among the Members and supersedes all prior agreements, oral or written.
9.5 Notices. All notices required under this Agreement shall be in writing and delivered to the Member’s address listed in Article II, or as updated in writing.
IN WITNESS WHEREOF, the undersigned Members have executed this Operating Agreement as of the Effective Date written above.
______________________________________
[Member 1 Full Legal Name]
Date: _______________
______________________________________
[Member 2 Full Legal Name]
Date: _______________
[Add additional signature lines as needed for each Member]
How to Fill Out Each Section
Here is a step-by-step guide to customizing the template for your LLC:
Article I — Formation
Fill in your LLC’s exact legal name (as it appears on your Articles of Organization), the state where you filed, the date you filed, and your registered agent’s details. For the purpose clause, the broad language “any and all lawful business activities” works for most LLCs and does not limit what your business can do. If you need help choosing a registered agent, see our What Is a Registered Agent? guide.
Article II — Members
For a single-member LLC, list yourself and your capital contribution (the money or property you put into the business). For multi-member LLCs, list every member, their contribution, and their ownership percentage. Make sure the percentages add up to exactly 100%.
Article III — Profits and Distributions (Multi-Member)
Most LLCs allocate profits in proportion to ownership percentages. If you want a different arrangement (for example, one member contributes money while another contributes labor), you can specify custom allocation terms. Just make sure all members agree in writing.
Article IV — Management
Choose between member-managed (all members participate in decisions) and manager-managed (one or more designated managers run the business). Most small LLCs are member-managed. If you choose manager-managed, list the manager(s) by name.
Articles V-VI — Transfers and Withdrawal (Multi-Member)
The Right of First Refusal clause protects existing members from unwanted outsiders joining the LLC. The withdrawal and buyout provisions establish a clear process for members who want to leave. Decide on the notice period (30-180 days is typical) and payment terms (lump sum vs. installments).
Dissolution and General Provisions
These sections are largely standard and rarely need significant customization. The dispute resolution clause (mediation then arbitration) is strongly recommended for multi-member LLCs, as it provides a structured process for resolving conflicts without going to court.
Customization Tips
- Add a non-compete clause if you want to prevent members from starting competing businesses while they are part of the LLC.
- Specify manager compensation if one member is doing most of the day-to-day work. A salary or management fee can compensate the managing member before profits are distributed.
- Include an insurance requirement requiring the LLC to maintain general liability insurance and other appropriate coverage.
- Address intellectual property if your business involves patents, trademarks, copyrights, or trade secrets. Specify that IP created for the business belongs to the LLC, not individual members.
- Plan for death or incapacity by specifying what happens to a member’s interest if they die or become incapacitated. Common options include: the interest passes to their estate, the remaining members buy it out, or the LLC dissolves.
- Define “majority” explicitly — does it mean a majority of membership interests (weighted by ownership) or a majority of members (one vote per person, regardless of ownership)?
When to Hire a Lawyer
Our free templates are suitable for straightforward LLC situations. However, you should consider hiring an attorney to draft or review your operating agreement if:
- You have three or more members with significantly different capital contributions or roles
- Members are contributing non-cash assets (real estate, intellectual property, equipment) that need to be valued
- You want complex profit-sharing arrangements that differ from ownership percentages
- Your LLC holds significant assets (real estate portfolios, valuable IP, etc.)
- You operate in multiple states with different LLC laws
- You want to include vesting schedules for members who earn their ownership over time
- Any member is investing a large sum of money and wants specific protections
An attorney-drafted operating agreement typically costs $500 to $2,000 for a basic agreement and $2,000 to $5,000+ for complex multi-member arrangements. If your LLC involves significant money, assets, or partnerships, this is a worthwhile investment.
For simpler situations, many LLC formation services include operating agreement templates as part of their packages. Northwest Registered Agent and ZenBusiness both include an operating agreement template with their formation services.
States That Require an Operating Agreement
While an operating agreement is strongly recommended for every LLC regardless of state, five states explicitly require one by law:
- California — Required by California Revised Uniform Limited Liability Company Act. Can be oral or written, but written is strongly recommended.
- Delaware — Required under the Delaware LLC Act (Section 18-101). Can be written, oral, or implied. Delaware gives maximum flexibility to LLC agreements.
- Maine — Required by Maine Revised Statutes Title 31, Chapter 21. Must be in writing for LLCs with more than one member.
- Missouri — Required by Missouri Revised Statutes Section 347.081. Can be written or oral.
- New York — Required by the New York LLC Law (Section 417). Must be in writing.
In the remaining 45 states, an operating agreement is not legally required but is considered a best practice and may be required by banks, lenders, and business partners.
How to Sign and Store Your Operating Agreement
- Print the agreement. Once you have customized the template, print two copies for a single-member LLC or one copy per member plus one for the LLC’s records.
- All members sign and date. Every member listed in the agreement must sign their designated signature line. For single-member LLCs, only the sole member signs.
- Do NOT file with the state. Unlike your Articles of Organization, the operating agreement is a private, internal document. You do not file it with the Secretary of State. The state does not need to see it or approve it.
- Store securely. Keep the original signed copy with your LLC’s important documents (Articles of Organization, EIN letter, business licenses). Each member should also keep a personal copy.
- Share when needed. Banks will ask for a copy when you open a business account. Lenders may request it during loan applications. Have a clean copy ready.
- Update when things change. If you add a member, change ownership percentages, or modify any terms, draft a written amendment signed by all current members. Attach it to the original agreement.
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Frequently Asked Questions
Do I need an operating agreement for a single-member LLC?
While most states do not legally require one for single-member LLCs, you should always have one. It strengthens your liability protection by demonstrating that your LLC is a separate entity from you personally. Banks also typically require one to open a business account. Five states (CA, DE, ME, MO, NY) require it by law regardless of the number of members.
Is an operating agreement the same as Articles of Organization?
No. Articles of Organization is the document you file with the state to legally create your LLC. The operating agreement is an internal document that defines how your LLC operates — ownership, management, profit distribution, etc. You file Articles of Organization with the Secretary of State; you keep the operating agreement in your records.
Can I write my own operating agreement?
Yes. For straightforward LLCs (especially single-member), a template like the ones provided above is sufficient. Fill in the bracketed fields, customize any sections that need adjusting, and have all members sign. For complex situations with multiple members, unequal contributions, or significant assets, consider having an attorney review the document.
What happens if my LLC does not have an operating agreement?
Without an operating agreement, your LLC is governed by your state’s default LLC laws, which may not align with your intentions. This can lead to disputes over profit distribution, management authority, and dissolution procedures. It can also weaken your liability protection if a court finds that your LLC lacks basic formalities.
How often should I update my operating agreement?
Update your operating agreement whenever there is a material change to your LLC: adding or removing a member, changing ownership percentages, modifying management structure, or adjusting profit distribution. Each update should be documented as a written amendment signed by all current members.
Related Guides
- LLC Operating Agreement Guide
- What Does LLC Stand For?
- Sole Proprietorship vs LLC
- Best LLC Formation Services 2026
- How Much Does It Cost to Start an LLC?
- What Is a Registered Agent?
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