Free LLC Operating Agreement Template

An LLC operating agreement outlines how a limited liability company is structured and managed. It gives clear guidelines for governance, ensuring smooth operations and preventing disputes.

This document also clarifies that the LLC is separate from its owners. Any actions taken under the LLC are distinct from individual actions, preventing owners from personal liability.

Without an operating agreement, an LLC is governed by default state laws. These rules can be enough for some companies, but they may restrict the growth of others. It’s best to write your own LLC operating agreement to ensure your company operates how you want it to.

Some states legally require LLCs to have an operating agreement to remain compliant:

• California (CA Corp Code § 17701.13)
• Delaware (6 DE Code § 18-101)
• Maine (31 ME Rev Stat § 1531)
• Missouri (MO Rev Stat § 347.081)
• New York (NY LLC L § 417)

All other states do not have official requirements for LLCs to write and maintain an operating agreement in their records. However, it’s highly recommended to have an LLC operating agreement even when it’s not legally required. By writing an LLC operating agreement, you can:

• Create a clear structure for running the company
• Separate the company from its owners (for liability)
• Clarify ownership, roles, and decision-making authority
• Assign voting rights
• Detail the processes for dissolving or existing the LLC
• Outline the duties and responsibilities of each member
• Prove to third parties (like lenders) who has the authority to act on the business’s behalf

There are two main types of LLC operating agreements: single-member and multi-member. The type of LLC operating agreement template you need will depend on the number of owners the company has.

Single-Member LLC Operating Agreement

If you are the only owner of the company, then you will likely need a single-member LLC operating agreement. These agreements are generally less complex than those of multi-member LLCs, as all authority typically resides with one member, and there is less risk of internal conflict.

Multi-Member LLC Operating Agreement

LLCs with more than one owner will need a multi-member LLC operating agreement. These documents are generally more complex due to the various issues that arise when multiple parties have an interest in the company.

For example, multi-member operating agreements often have terms that define each party’s membership interest in terms of outstanding units or percentages. Additional concepts that a multi-member LLC operating agreement can address include:

• Adding or removing members from the company
• Selling or transferring a member’s ownership interest
• Voting on key business decisions
• Establishing a priority for distributions or profit sharing among members
• Making additional capital contributions to support the business
• Dissolving the company

Members should consider how these terms within a multi-member LLC operating agreement can impact their individual rights and duties as owners.

Access each type of LLC operating agreement below and use our guided form to customize the template to fit your specific business needs.

Single Member LLC

This document governs the operations of an LLC with only one member (owner).

Multi Member LLC

This agreement is for LLCs with two or more members, each of whom holds a membership interest in the company.

Creating an operating agreement for your LLC can ensure all members understand its structure and processes. Learn how to write an LLC operating agreement below.

Step 1 – Add the Company Information

Start by writing basic company information, including the:

• Company name
• State of registration
• Tax classification (partnership, S-corporation, or C-corporation)
• End of the LLC’s fiscal year
• Whether the LLC will be member-managed or manager-managed

Step 2 – Name Your Registered Agent

A registered agent receives official communications from government bodies on behalf of your LLC. Your registered agent can be a member of your LLC, but they’re often a third party to ensure privacy and compliance with state laws.

Step 3 – Provide Member Details

Record essential details for each LLC member:

• Full legal name
• Number of membership units or ownership interests
• Class of membership units owned (for example, Class A or Class B)
• Percentage of voting capital/voting power
• Percentage of total capital owned
• Admission date into the LLC
• Consideration that the member paid (cash, assets, etc.)

Step 4 – Record Voting Procedures

Outline the details for voting procedures, including the following:

• Whether a unanimous or majority-in-interest (more than 50% of voting units) vote is required to approve a member’s transfer of ownership
• Whether a unanimous or majority-in-interest vote is required to admit new members
• Whether a unanimous or majority-in-interest vote is required to dissolve the LLC
• The percentage of voting members needed for a quorum
• How voting members can decide on other matters (unanimous, majority-in-interest, or ⅔ majority-in-interest)

Step 5 – Write Additional Terms & Final Details

Write any additional terms as you see fit. For example, you can stipulate that the members will act in good faith and in the best interests of the LLC.

Finish the agreement by adding the LLC’s principal place of business and the date that the agreement will go into effect. Have all members sign the contract so they can activate the document and be bound by its terms.

Step 6 – Amend as Needed

Over time, you may need to amend the terms of the operating agreement due to changes within the company. Some changes you may want to make include:

• Adding or removing members
• Obtaining new investments or financing
• Updating business purpose
• Revising the management structure
• Making new policy changes
• Clarifying dissolution or buyout terms

To update the agreement, you should use an amendment to the LLC operating agreement, which formally documents any changes to the original terms. Date and attach all amendments to the original contract to guarantee enforceability.

Consider other provisions present in Legal Templates’s operating agreement form to ensure you complete a comprehensive document:

• Indemnification: A hold-harmless statement from the company.
• Profit and loss distributions: Methods for sharing profits and losses among LLC members.
• Member roles and responsibilities: Duties for each member (supplying new capital, engaging in business deals, etc.)
• Organization expenses: A statement clarifying that the LLC will pay for company expenses.
• Salaries: A statement clarifying that members won’t receive a salary (unless approved via a majority-in-interest vote).
• Dispute resolution: A statement proclaiming that any disputes will be resolved via arbitration or another method of the members’ choice.

Are you wondering what an operating agreement looks like for an LLC? View our free sample to learn what terms to include. Then, use our guided form to customize your own. Download a copy as a PDF or Word file for internal storage in your company’s records.

This is a document preview. Your customized version will be created after you answer a few quick questions.

State of ______________

LLC OPERATING AGREEMENT

This LLC Operating Agreement (this "Agreement") is made this ______ day of _______________,

20______, among/between _____________________________________________________________

____________________________________________________________________________________

________________________________ (each a "Member" and collectively referred to as the "Members").

The parties agree as follows:

I. Introductory Provisions

1. Name. The name of the company shall be ____________________________ (the "Company").

2. Principal Place of Business. The Company's principal place of business shall be at

________________________________________ [Address].

3. Purpose. The purpose of the Company is to engage in any lawful act or activity for which a

Limited Liability Company may be formed within the State of _________________.

4. Registered Agent. ________________________ [Agent] is the Company's initial registered

agent. The registered office is ________________________________________ [Address].

5. Term. The term of the Company commences on ____________________, 20______ and shall

continue until dissolved pursuant to this Agreement.

6. Limitation of Liability. The liability of each Member and each employee of the Company shall

be limited to the fullest extent provided by law.

7. Names and Addresses of Members. The Members' names and addresses are attached as

Exhibit 1 to this Agreement.

8. Fiscal Year. The fiscal year of the Company shall end on ________________________ [Day of

the year].

II. Membership Interests and Voting

1. Members. The Members are those identified in Exhibit 1. For all purposes hereunder,

references to Exhibit 1 shall mean Exhibit 1 as may be modified from time to time to reflect

changes in Members, Units and contributions.

2. Classification of Membership Interests. The Company is authorized to issue

( ☐ __________ membership units of) Class A Voting Capital (“Voting Capital”) to the voting

Members (“the Voting Members”). The Voting Members have the right to vote in proportion to their

respective Percentage Voting Interest (“PVI”). The PVI shall be calculated by dividing the individual

Member’s Voting Capital by the total Voting Capital. The Company may issue

( ☐ __________ membership units of) Class B, Nonvoting Capital (“Nonvoting Capital”) to the

Members who have no right to vote on any matters. Each membership unit issued shall be referred

to as a "Unit." The membership interests and class are included in Exhibit 1.

3. Percentage Ownership. The percentage ownership shall be calculated by combining the total

of a Member’s Voting Capital and Nonvoting Capital and dividing the sum by the total of all the

Members’ Voting and Nonvoting Capital. The initial percentages are included in Exhibit 1.

4. Membership Votes. The Voting Members shall vote upon all matters upon which the Members

have the right to in proportion to their PVI. The nonvoting Members have no right to vote. The

Voting Members may act only (Check one) ☐ collectively and unanimously ☐ with majority-

in-interest ☐ with a 2/3-majority-in-interest. For purposes of this Agreement, a “majority-in-

interest” shall mean consent or approval of those Members holding a majority of the Units eligible

to vote on the respective matter.

5. Quorum. The Members holding (Check one) ☐ 100% ☐ at least 75% ☐ at least 67%

☐ more than 50% of the Voting Capital in the Company represented in person, by telephonic

participation, or by proxy, shall constitute a quorum at any meeting of the Voting Members.

6. Delegation. The Members may delegate their powers but not their responsibilities, including

voting, to officers or agents or employees of the Company.

7. Transfer. No Member may transfer any interest without the consent of (Check one) ☐ all of

the Members ☐ a majority-in-interest of the Members (excluding the proposed transferor and

transferee).

8. New Members. New or additional members may be admitted at any time by affirmative vote of

(Check one) ☐ all of the Members ☐ a majority-in-interest of the Members.

III. Management

1. The Company shall be managed by a Manager. The initial Manager shall be

________________________ [Manager]. The term of service of the Manager shall commence on

____________________, 20______ and continue until the Members entitled to vote elect a new

Manager or until the Manager resigns or is unable to serve (the "Manager Term"). The Manager

may also be designated an officer of the Company with the title of "President" at the discretion of

the Members.

2. The Manager shall be responsible for all day-to-day decisions affecting the Company except for

the following, which shall be reserved to the Members: __________________________________

______________________________________________________________________________

______________________________________________________________________________.

3. The Manager shall receive compensation in the amount approved by a majority-in-interest of the

members.

4. The Manager shall (a) devote all effort, time, energy and skill (reasonable vacations and sick-

days excepted) to managing the Company as the Members deem reasonable and appropriate; and

(b) use its commercially reasonable efforts to promote the success of the Company.

5. The Company shall reimburse the Manager for any and all reasonable expenses incurred or

advanced by the Manager on behalf of the Company in connection with the business and affairs of

the Company.

IV. Capital Contributions

1. Initial Contributions. The Members initially shall contribute capital as described in Exhibit 1 as

a condition of the issuance of the respective Units indicated in Exhibit 1. The contribution

percentages and totals in the schedule shall be adjusted as they change to reflect the admission of

new Members or any other event.

2. Additional Contributions. No Member shall be obligated to make any additional contribution to

the Company’s capital without the prior unanimous consent of the Members.

3. Interest. The Members are not entitled to interest or other compensation on their capital

contributions except as expressly provided in this Agreement.

4. Return. No Member has any right to any return of capital or other distribution except as

expressly provided in this Agreement. No Member has any drawing account in the Company.

V. Allocation of Profits and Losses

1. Profits/Losses. For accounting and tax purposes, net profits or net losses shall be determined

on an annual basis. Profits and losses will be distributed in proportion to each Member’s relative

proportion of total capital in the Company, as set forth in Exhibit 1.

2. Distributions. The Members shall distribute funds annually or, if determined as necessary by

the Voting Members, at more frequent intervals. No Member has the right to demand or receive

distribution in any form other than money. No Member may be compelled to accept distribution of

assets in lieu of money, except on dissolution and winding up of the Company.

VI. Salaries, Reimbursement, and Expenses

1. Organization Expenses. All expenses in connection with the management and organization of

the Company will be paid by the Company.

2. Salary. No salary will be paid for the performance of duties under this Agreement by a Member

(except as provided for by the Manager who may be a Member) unless approved in writing by a

majority-in-interest of the Members, excluding the Member to receive the salary and such

Member’s interest.

3. Legal and Accounting Services. The Company may obtain legal and accounting services to

the extent reasonably necessary.

VII. Records and Reporting

1. Books. The Manager shall maintain complete and accurate books and records in accordance

with generally accepted accounting principles.

2. Records. The Company shall maintain at its principal office the following: (a) the full name and

last known business or residence address of each Member; (b) records detailing all capital

accounts, including entries for contributions and distributions, ownership interest, percentage

ownership, and voting interests; (c) a copy of the certificate of formation of the Company and any

and all amendments; (d) copies of all federal ,state, and local income tax or returns and reports for

the six most recent taxable years; (e) a copy of this Agreement and any amendments; (f) copies of

financial statements of the Company for the six most recent fiscal years; (g) the books and records

as related to the affairs of the Company; and (h) true and full information regarding the status of

the business and financial conditions of the Company, including the amount of cash and

description of the agreed value of any property or services contributed or that will be contributed by

Members.

3. Accountings. At the close of each fiscal year, the Manager shall make a full and accurate

accounting of the affairs of the Company, including a balance sheet, a profit and loss statement,

and a statement of the Members’ equity showing the respective capital accounts and distributions,

if any, and any other information necessary for a complete and fair presentation of the financial

condition of the Company.

4. Inspection. Each Member has the right, on reasonable request related to their interest as a

Member, to: (a) inspect and copy during normal business hours any of the Company’s records

described above; (b) obtain from the Company promptly after becoming available a copy of the

Company’s federal, state, and local income taxes and returns for each fiscal year.

5. Partnership for Tax Purposes. The Members intend that the Company shall be treated as a

partnership for federal and, if applicable, state or local income tax purposes, and that the Members

and the Company shall file all tax returns and shall otherwise take all tax and financial reporting

positions in a manner consistent with such treatment.

VIII. Dissolution and Liquidation

1. Dissolution. The Company shall be dissolved upon the occurrence of any the following:

a. Approval by (Check one) ☐ all of the Members ☐ a majority-in-interest of the Members.

b. Bankruptcy, death, dissolution, expulsion, incapacity, or withdrawal of any Member unless a

majority-in-interest of the remaining Members gives written consent to continue.

c. As required by law or judicial decree.

2. Winding Up and Distribution. Upon dissolution of the Company one or more Members elected

by a majority-in-interest shall be the liquidating Member(s) (“Liquidating Member”). The Liquidating

Member shall wind up the Company’s affairs, liquidate the property and assets, and terminate any

remaining business. The Liquidating Member(s) shall give a full accounting of the assets and

liabilities. The assets and liabilities may be liquidated by selling the assets and distributing the net

proceeds. The proceeds of the liquidation shall be distributed in this order: (1) the expenses of

liquidation; (2) debts and liabilities of the Company (including debts of the Company to the

Members or affiliates); (3) a reserve for contingent or unforeseen liabilities or obligations to third

parties (to be held in escrow by an agent chosen by the Liquidating Member); (4) to the Members

in proportion to the Units owned by each Member relative to the total of all issued Units.

IX. Indemnification

1. Members. No Member shall be liable to the Company or to the other Members for damages or

otherwise with respect to any actions taken in good faith and reasonably believed to be in the best

interests of the Company, unless the Member has committed fraud, gross negligence, willful or

want misconduct, or a material breach of this Agreement or the fiduciary duties of the Member.

2. Indemnification by Company. The Company shall indemnify, hold harmless and defend the

Members in their capacity as Members, the Manager and all managers, or officers, from and

against any loss, expense, damage, or injury sustained as a result of any acts or omissions arising

out of any activity of the Company, unless the Member seeking indemnification has committed

fraud, gross negligence, willful or wanton misconduct, or a material breach of this Agreement or the

fiduciary duties of the Member relating to the basis for the claim for indemnification.

3. Indemnification by Members. The Members agree to indemnify and defend the Company,

including the other Members, the Manager and each of their respective employees, agents,

partners, shareholders, officers, and directors; and hold them harmless from and against any and

all claims, liabilities, damages, costs, and expenses arising out of any fraud, gross negligence,

willful or wanton misconduct or a breach of this Agreement by that Member.

4. Insurance. The Company shall have the authority to purchase and maintain insurance covering

any person who is or was a Member or agent of the Company against any liability asserted against

the person arising out of his/her status as a Member or agent of the Company, regardless of

whether the Company would have the authority to indemnify such person against liability under this

Agreement or applicable law.

X. Confidential Information

1. General. Each Member and the Manager hereby acknowledges that the Company has or may

have, utilizes or may utilize, may develop and/or may acquire proprietary intellectual property,

trade secrets, and other confidential information not generally known to the public (collectively,

“Confidential Information”). Each Member and the Manager acknowledges that such Confidential

Information is a special, valuable, and unique asset of the Company and agrees that it will not use

any such Confidential Information for its own benefit or for the benefit of any person or entity with

which it may be associated in any manner except the Company or its Affiliates. Except (i) in

connection with maintaining and reporting its investment in the Company as reasonably required in

its own operation, (ii) in connection with the responsibilities hereunder or operation of the Company

and for the benefit thereof, or (iii) as may be required by law or court order (in which event the

Member or the Manager so required shall promptly notify the Company, as the case may be, to

give the respective entity an opportunity to seek an appropriate protective order), each Member

and the Manager agrees that it will not disclose any Confidential Information to any Person unless

such information is previously known, was disclosed on a non-confidential basis or was disclosed

by the Company in a manner intended to not be confidential. “Affiliate” of a Party means (1) any

corporation, partnership, trust or other entity controlling, controlled by or under common control

with such Party; (2) any executive officer, director, trustee or general partner of any Party

described in (1) above; or (3) any spouse, lineal ancestor, lineal descendant or member of the

household of such Party. For purposes of this section, “control” shall mean the control or

ownership of fifty percent (50%) or more of the voting securities in the Party referred to.

2. Member Contributions. Each Member and the Manager further acknowledges that it may

contribute ideas, knowledge, know-how and, potentially, Confidential Information of such disclosing

Member or the Manager to the Company, the employees, agents or contractors of the Company.

Each disclosing Member or the Manager shall retain ownership of such Confidential Information

but grants to only the Company, not to the individual(s) to whom the information was disclosed in

his/her respective personal capacity(ies), the limited right to use such Confidential Information

solely and exclusively for the benefit of the Company, and not any individual Member other than

the disclosing Member; and each Member and the Manager other than the discloser promises and

agrees to not use Confidential Information of a disclosing Member or the Manager for any purpose

whatsoever except in connection with the Company and except with the written consent of both the

disclosing Member and the Company. For purposes of this Section X, all references to the

Company shall include its Affiliates.

3. Exceptions. Notwithstanding the foregoing, Confidential Information shall not include any

information which a Member or the Manager can show, by contemporary documentation, (i) is now

or later becomes available in the public domain without breach of this Agreement by the Member

or the Manager, (ii) was in the possession of the Member or the Manager prior to disclosure to the

Member or the Manager by the Company, (iii) was received from a third party without breach of

any nondisclosure obligations to the Company or otherwise in violation of the Company’s rights, or

(iv) was developed by the Member or the Manager independently of any Confidential Information

received from the Company.

XI. Representations and Warranties

1. Investment Matters. Each Member, severally and not jointly, hereby warrants and represents to

the Company and to each other Member that (i) such Member is acquiring his, her or its Units

solely for investment and not with a view to the distribution or resale thereof or to divide his or its

participation with others, (ii) such Member is acquiring his, her or its Units with his, her or its own

funds and for his, her or its own account and not on behalf of any other Person, (iii) neither such

Member nor any other Person acting on his, her or its behalf has paid any commission or other

compensation to any Person in connection with such Member’s acquisition of his, her or its Units,

and (iv) such Member acknowledges that none of the Units has been registered or qualified under

the Securities Act of 1933, as amended from time to time (the “Securities Act”), or any applicable

state securities laws, and, in addition to the other restrictions on disposition contained in this

Agreement, the Units may not be sold, transferred or otherwise disposed of in whole or in part

unless a registration statement under the Securities Act with respect to such Units and qualification

in accordance with all applicable state securities laws has become effective, or unless such

Member establishes to the satisfaction of the Company that an exemption from such registration

and qualification is available.

2. Authorization; No Conflicts; Due Execution and Delivery. Each person now or hereafter

becoming a Party to this Agreement hereby represents and warrants to the Company and each

other Party hereto that such person is of legal age and is duly authorized to execute, deliver and

perform this Agreement, and such execution, delivery and performance will not breach, conflict

with, give rise to a default under, or violate any law, rule, regulation or order applicable to such

person or by which such person is bound, nor any material contract or agreement to which such

person is a party or by which such person is bound. Each person executing or delivering this

Agreement in a representative capacity on behalf of another person represents and warrants to the

Company and each Party hereto that such representative is duly authorized to do so.

XII. Miscellaneous

1. Dispute Resolution. Any dispute arising out of or related to this Agreement that the Members

are unable to resolve by themselves shall be settled by arbitration in the State of

_________________ in accordance with the rules of the American Arbitration Association. The

written decision of the arbitrator(s), as applicable, shall be final and binding on the Members.

Judgment on a monetary award or enforcement of injunctive or specific performance relief granted

by the arbitrator(s), or to enforce this arbitration agreement, may be entered in any court having

jurisdiction over the matter without the requirement of a bond.

2. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Members

and their respective legal representatives, heirs, administrators, executors, successors and

permitted assigns.

3. Severability. If any provision of this Agreement is held to be invalid, illegal or unenforceable in

whole or in part, the remaining provisions shall not be affected and shall continue to be valid, legal

and enforceable as though the invalid, illegal or unenforceable parts had not been included in this

Agreement.

4. Governing Law. The terms of this Agreement shall be governed by and construed in

accordance with the laws of the State of _________________, not including its conflicts of law

provisions.

5. Further Assurances. At the written request of one Member, the other Members shall execute

and deliver such other documents and take such other actions as may be reasonably necessary to

effect the terms of this Agreement.

6. Headings. The section headings herein are for reference purposes only and shall not otherwise

affect the meaning, construction or interpretation of any provision in this Agreement.

7. Entire Agreement. This Agreement contains the entire understanding between the Members

and supersedes and cancels all prior agreements of the Members, whether oral or written, with

respect to such subject matter.

8. Counterparts. This Agreement may be executed in one or more counterparts, each of which

shall be deemed an original and all of which together, shall constitute one and the same document.

9. Amendment. This Agreement may be amended or modified only by a written agreement signed

by all of the Members.

10. Notices. Any notice or other communication given or made to any Member under this

Agreement shall be in writing and delivered by hand, sent by overnight courier service or sent by

certified or registered mail, return receipt requested, to the address in Exhibit 1 or to another

address as that Member may subsequently designate by notice and shall be deemed given on the

date of delivery. For a notice to be valid, an email copy shall accompany each of the foregoing

modes of noticing a Party. An email notice, by itself, shall suffice as notice at such time as the

sender receives a receipt acknowledgment or the recipient replies, directly or indirectly, to such

notice.

11. Waiver. No Member shall be deemed to have waived any provision of this Agreement or the

exercise of any rights held under this Agreement unless such waiver is made expressly and in

writing. Waiver by any Member of a breach or violation of any provision of this Agreement shall not

constitute a waiver of any other subsequent breach or violation.

12. Survival. Notwithstanding termination of this Agreement and the Company, the following

Sections hereof shall survive such termination: IX.3, X and XII.

IN WITNESS WHEREOF, this Agreement has been executed and delivered as of the date first written

above.

Member Signature

Member Full Name

Member Signature

Member Full Name

Member Signature

Member Full Name

Member Signature

Member Full Name

Member Signature

Member Full Name

Member Signature

Member Full Name

EXHIBIT 1

MEMBERS

As of __________________________ [Date]

Name and Address

# Units/

Class

% of

Voting

Capital

% of Total

Capital

Date

Consideration

Paid

_________________________

________________________

_

_________________________

_________________________

________

_______%

_______% _____________

$____________

_________________________

________________________

_

_________________________

_________________________

________

_______%

_______% _____________

$____________

_________________________

________________________

_

_________________________

_________________________

________

_______%

_______% _____________

$____________

_________________________

________________________

_

_________________________

_________________________

________

_______%

_______% _____________

$____________

_________________________

________________________

_

_________________________

_________________________

________

_______%

_______% _____________

$____________

_________________________

________________________

_

_________________________

_________________________

________

_______%

_______% _____________

$____________

Total

Once all members sign the LLC company agreement, provide each member with a copy for their records. You may also want to have copies available at the following locations:

• LLC’s legal counsel
• LLC’s registered agent
• LLC’s principal place of business

Banks, investors, and other parties may also require a copy of the operating agreement before approving funding.

LLC operating agreements often include sensitive business information. To protect your business, only share essential elements with third parties as needed. If sensitive information is included, consider using a non-disclosure agreement to safeguard your company’s confidentiality. It may also be necessary to redact specific details before providing a copy to outside parties.