LLC Operating Agreement Template

• 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:

• If you form a corporation (use a corporate bylaws template instead).  

• If you operate as a sole proprietorship with no LLC registered.  

• If you are the only owner of an LLC and want to document the separation between personal and business assets (a single-member LLC operating agreement template is recommended).

• 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.

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.