LLC Operating Agreement Template

Pro template

4.7 (40 reviews)
All states | 2 types
Updated Jun 17, 2026
~ 12 pages
PDF
3.6K downloads
An operating agreement is a legal document between LLC members defining ownership, management, and profit distribution terms. It is used to establish company structure and protect members’ rights under state law.
LLC Operating Agreement Page 1
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Written by Karyna Pukaniuk - Reviewed by Kate Adkham, LLB

Template Types

Single-Member LLC Operating Agreement
This form helps to govern the operations of a single-member limited liability company.

What Is an LLC Operating Agreement?

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An LLC operating agreement is a written contract between an LLC's owners. It explains how the company will be managed, how profits and losses will be shared, and how major decisions will be made.

An LLC is a flexible business structure that combines elements of a corporation and a partnership. Compared to a partnership, it provides stronger liability protection while maintaining flexible profit-sharing arrangements. Like a C-corporation, it protects its owners from personal liability for business debts. 

LLCs typically avoid double taxation, since profits pass through to members' personal tax returns. However, members may owe self-employment taxes on their share of profits unless the LLC elects to be taxed as an S corporation, which can offer certain tax advantages.

Meanwhile, LLCs differ from corporations in structure and ownership. While corporations issue stock to shareholders and must follow stricter formalities, such as appointing a board of directors and holding annual meetings, LLCs offer more operational flexibility. 

An LLC operating agreement template sets rules for governance, ownership, capital contributions, and conflict resolution. It may also address such aspects as mediation, arbitration, and contain indemnity clauses to protect the business and its members.

When to Use an LLC Operating Agreement?

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Use an operating agreement for an LLC template when you:

  • Form a new LLC and want to define ownership and management rules.  

  • Start a business with two or more members.  

  • Open a business bank account, and the bank requests an operating agreement for an LLC.  

  • Want to clarify profit sharing, voting rights, or decision-making procedures within the company.  

  • Bring in a new investor or member.  

When not to use an LLC operating agreement:

What Are the Parties to the LLC Operating Agreement?

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  • Member: A person or company that owns part of the LLC; they invest money, share in profits and losses, and may vote on important business decisions.
  • Manager: The person (or company) chosen to run the LLC’s daily operations and make business decisions; this can be one of the owners or someone hired from outside.
  • Registered agent: The person or company listed with the state to receive official mail, legal papers, and government notices for the LLC.

What to Include in the LLC Operating Agreement?

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  • Company name and location: States the full legal name of the LLC and the address of its principal place of business. 

  • Company organization: Confirms the date of formation, state of registration, registered agent, and governing law (jurisdiction).  

  • Capital contributions: Describes the money, property, or services each member contributes and whether additional contributions may be required.  

  • Profits, losses, and distributions: Explains how revenue, losses, and cash or property distributions will be allocated among members for tax and accounting purposes.  

  • Management: Defines whether the LLC is member-managed or manager-managed and outlines decision-making authority and voting rights.  

  • Compensation: States whether members or managers will receive salaries, reimbursements, or other compensation for services.  

  • Bank accounts: Identifies how business bank accounts will be opened and managed, and who has the authority to access company funds.  

  • Ownership of company assets: Clarifies that all business property and assets belong to the LLC, not the individual members, reinforcing limited liability protection.  

  • Books, records, and accounting: Sets requirements for maintaining financial records, income statements, tax filings, and members’ rights to inspect company documents.  

  • Dissolution: Describes events that may trigger dissolution and explains how assets will be liquidated and distributed.  

  • Mediation: A dispute resolution process where LLC members agree to work with a neutral third party to resolve conflicts outside of court. This clause helps reduce legal costs, preserve business relationships, and provide an effective way to handle disagreements.

  • Severability: A provision stating that if one part of the operating agreement is found invalid or unenforceable, the rest of the agreement remains in effect. 

  • Declaration: A statement confirming that the members agree to the terms of the limited liability company operating agreement.  

  • Signatures and date: Electronic signatures of all members (and managers, if applicable) and the effective date of the agreement.

What Are the Key Terms of the LLC Operating Agreement?

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  • Beneficial ownership: the legal concept that identifies the real person or people who control a business and its operations and benefit from its profits, even if the business is registered under another name. It is essential for proper IRS tax forms filing.
  • Capital contributions: This details each member's contribution to the LLC. It can be in the form of money, assets, or services. 
  • Distribution of profits and losses: Specifies how and when the LLC will allocate profits and losses among the members.
  • Members' voting rights: This section defines how each member's votes influence decisions. It can be proportional to their capital contributions or equal, regardless of contributions.
  • Management and duties: Explains whether the LLC is member-managed or manager-managed and describes their specific roles and responsibilities.
  • Dissolution process: This outlines the circumstances or events that can lead to the termination of the LLC.

How to Fill Out an LLC Operating Agreement?

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  1. Enter the full legal name and address of the LLC as registered with the state.

  2. List all members and their contact information.

  3. State the date of formation and the state of jurisdiction.

  4. Mention the purpose of the LLC's formation.

  5. Enter each member's ownership percentage and capital contribution.

  6. Select whether the LLC is member-managed or manager-managed.

  7. Add the names of managers and entitle the Chief Executive Manager.

  8. Add dispute-resolution terms, such as mediation or arbitration.

  9. Include indemnity and severability clauses.

  10. Describe dissolution and liquidation procedures.

  11. Confirm that every member has consented to the obligations and expectations outlined in the agreement.

  12. Have all members add their electronic signatures and date the agreement.

An LLC operating agreement, though not required for LLC registration, is an essential document that clarifies roles, duties, and procedures while providing legal protection for all members. By using a well-structured template, you can prevent both disputes within the company and legal issues that may arise.

Requirements for this document vary by state. Review your state's laws and procedures — or consult a licensed attorney — before using this template to ensure it's valid and enforceable where you live.

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