⚖️ LLC Operating Agreement Template — Free Template

A complete LLC operating agreement covering ownership units, capital contributions, profit/loss allocation, management structure, voting rights, transfers, and dissolution. Works for single-member and multi-member LLCs in all 50 states.

Who needs this

Any LLC owner — whether you just filed a single-member LLC or are forming a multi-member LLC with partners. Required by some states (CA, NY, MO, ME, DE) and strongly recommended in all others to preserve your liability shield.

What it covers

• Company formation & registered office
• Members, units, and capital contributions
• Profit, loss, and distribution allocation
• Management (member-managed vs manager-managed)
• Voting rights & required approvals
• Books, records, and tax elections
• Transfer restrictions & right of first refusal
• Admission of new members
• Withdrawal, dissociation & buyout
• Dissolution & winding up
• Indemnification of members and managers

Template clauses

1. Formation & Name

This Operating Agreement ("Agreement") is entered into as of the Effective Date by and among the persons listed on Exhibit A (each a "Member" and collectively the "Members") of [COMPANY NAME], a limited liability company organized under the laws of the State of [STATE] (the "Company"). The Company was formed by filing Articles of Organization (or Certificate of Formation) with the [STATE] Secretary of State on [FORMATION DATE]. The rights and obligations of the Members shall be governed by this Agreement and, to the extent not addressed herein, the [STATE] Limited Liability Company Act (the "Act").

2. Purpose & Powers

The Company is organized for the purpose of [BUSINESS PURPOSE] and to engage in any other lawful act or activity for which a limited liability company may be organized under the Act. The Company shall have all powers necessary or convenient to carry out its purpose, including the power to acquire, hold, and dispose of property; to enter into contracts; to borrow money; to sue and be sued; and to do all other things lawful for an LLC.

3. Principal Office & Registered Agent

The principal office of the Company shall be located at [PRINCIPAL ADDRESS], or such other place as the Members may designate. The Company's registered agent and registered office in the State of [STATE] are as set forth in the Articles of Organization, or as may be changed by filing with the Secretary of State.

4. Term

The Company commenced on the date its Articles of Organization were filed and shall continue perpetually unless dissolved earlier in accordance with this Agreement or the Act.

5. Members, Membership Units & Capital Contributions

Each Member is listed on Exhibit A together with such Member's initial capital contribution and the number of Membership Units ("Units") issued in exchange therefor. The Units represent each Member's ownership interest in the Company, including economic rights to allocations and distributions and (subject to Section 8) voting rights. No Member shall be required to make any additional capital contribution except as unanimously agreed in writing. No Member shall be entitled to interest on, or to the return of, any capital contribution except as expressly provided in this Agreement.

6. Capital Accounts

The Company shall maintain a capital account for each Member in accordance with Treasury Regulation §1.704-1(b)(2)(iv). Each Member's capital account shall be (a) increased by such Member's capital contributions and allocated share of profits, and (b) decreased by distributions to such Member and allocated share of losses.

7. Allocations & Distributions

Profits, losses, and items of income, gain, loss, deduction, and credit shall be allocated to the Members pro rata in proportion to their Units (or such other allocation specified on Exhibit A). Subject to maintaining adequate working capital and required reserves, the Company shall make distributions to the Members at such times and in such amounts as the Members (or Manager) determine, with all distributions made pro rata in proportion to Units. The Company shall use commercially reasonable efforts to distribute at least enough cash each tax year to enable Members to pay federal and state income taxes attributable to the Company's allocated income (a 'tax distribution').

8. Management

{{#when management_type=member}}MEMBER-MANAGED. The Company shall be managed by its Members. Except as otherwise provided in this Agreement, each Member shall have authority to bind the Company in the ordinary course of business. Decisions shall be made by Members holding a majority of the outstanding Units, except that Major Decisions (Section 9) require the affirmative vote of Members holding at least {{supermajority_percent}} of the outstanding Units.{{/when}}{{#when management_type=manager}}MANAGER-MANAGED. The Company shall be managed by one or more Managers appointed by the Members. The initial Manager(s) shall be [MANAGER NAME(S)]. The Manager(s) shall have full authority to manage the day-to-day operations of the Company, subject to the Major Decisions in Section 9, which require Member approval. A Manager may be removed at any time, with or without cause, by Members holding a majority of the outstanding Units.{{/when}}

9. Major Decisions Requiring Member Approval

Notwithstanding anything else in this Agreement, the following actions shall require the affirmative vote of Members holding at least {{supermajority_percent}} of the outstanding Units: (a) amending this Agreement or the Articles of Organization; (b) admitting a new Member or issuing additional Units; (c) selling, leasing, or transferring all or substantially all of the Company's assets; (d) merging, consolidating, or converting the Company; (e) incurring indebtedness in excess of $[THRESHOLD]; (f) filing for bankruptcy or making an assignment for the benefit of creditors; (g) dissolving the Company; or (h) entering into any transaction with a Member or affiliate of a Member outside the ordinary course of business.

10. Meetings & Voting

Meetings of Members may be called by any Member (or, if manager-managed, by a Manager) on at least seven (7) days' written notice. Members may participate by any means of communication by which all participating Members can hear each other. A quorum shall consist of Members holding a majority of the outstanding Units. Any action that may be taken at a meeting may be taken without a meeting by written consent signed by Members holding the Units required to approve such action.

11. Books, Records & Tax Matters

The Company shall maintain complete books and records at its principal office, available for inspection by any Member upon reasonable notice. The Company shall be treated as a partnership for U.S. federal income tax purposes (or, if a single-member LLC, as a disregarded entity), unless the Members unanimously elect otherwise (including any election to be taxed as an S-corporation or C-corporation). The Company shall designate a Partnership Representative (or Tax Matters Partner) and shall prepare and timely file all required tax returns, delivering Schedule K-1s (if applicable) to Members within a reasonable time after year-end.

12. Transfer Restrictions & Right of First Refusal

No Member may sell, assign, pledge, or otherwise transfer all or any portion of such Member's Units without (i) the prior written consent of Members holding at least {{supermajority_percent}} of the other outstanding Units, and (ii) first offering the Units to the Company and then to the other Members on the same terms and conditions as the proposed third-party transfer. Any transferee who is not admitted as a Member in accordance with this Agreement shall hold only an economic interest with no voting or management rights.

13. Admission of New Members

A person may be admitted as a new Member only upon: (a) approval by Members holding at least {{supermajority_percent}} of the outstanding Units; (b) execution of a joinder agreement agreeing to be bound by this Agreement; and (c) payment of the agreed capital contribution. Upon admission, Exhibit A shall be updated to reflect the new Member, capital contribution, and Units.

14. Withdrawal, Death & Buyout

A Member may withdraw from the Company upon ninety (90) days' written notice to the other Members. Upon a Member's withdrawal, death, disability, bankruptcy, or other Dissociation Event, the remaining Members (or the Company) shall have the option, but not the obligation, to purchase the dissociated Member's Units at fair market value, determined by mutual agreement or, failing agreement, by an independent appraiser selected by the parties. The purchase price may be paid over a period of up to {{buyout_term}} with interest at the Applicable Federal Rate.

15. Dissolution & Winding Up

The Company shall dissolve upon the first to occur of: (a) the written consent of Members holding at least {{supermajority_percent}} of the outstanding Units; (b) the entry of a decree of judicial dissolution under the Act; or (c) any event that makes it unlawful for the Company's business to continue. Upon dissolution, the Company shall wind up its affairs, liquidate its assets, and distribute the proceeds in the following order: (i) to creditors, including Members who are creditors; (ii) to establish reserves for contingent liabilities; and (iii) to the Members in proportion to their positive capital account balances.

16. Indemnification

To the fullest extent permitted by the Act, the Company shall indemnify and hold harmless each Member, Manager, officer, employee, and agent of the Company from and against any and all losses, claims, damages, liabilities, and expenses (including reasonable attorneys' fees) arising out of or relating to the Company's business, except to the extent attributable to such person's fraud, gross negligence, willful misconduct, or knowing violation of law.

17. Limitation of Liability

Except as required by the Act, no Member, Manager, officer, employee, or agent of the Company shall be personally liable for any debt, obligation, or liability of the Company solely by reason of being a Member, Manager, officer, employee, or agent. This Agreement shall be construed to preserve the limited liability afforded by the Act to the maximum extent permitted.

18. Confidentiality & Non-Competition

Each Member agrees to keep confidential all non-public information regarding the Company, its business, customers, and financial affairs, and shall not use or disclose such information except in furtherance of the Company's business. During such Member's ownership of Units and for {{noncompete_term}} thereafter, no Member shall, directly or indirectly, engage in any business that competes with the Company within [GEOGRAPHIC SCOPE], to the extent permitted by applicable law.

19. Governing Law & Dispute Resolution

This Agreement shall be governed by and construed in accordance with the laws of the State of [STATE], without regard to conflict-of-laws principles. Any dispute arising out of or relating to this Agreement shall first be addressed through good-faith negotiation between the parties. If unresolved within thirty (30) days, the dispute shall be submitted to binding arbitration in [CITY, STATE] administered by JAMS or the American Arbitration Association under its Commercial Arbitration Rules. Judgment on the arbitration award may be entered in any court of competent jurisdiction.

20. Miscellaneous

This Agreement (together with Exhibit A and any joinder agreements) constitutes the entire agreement among the Members regarding the subject matter hereof and supersedes all prior oral or written agreements. No amendment shall be effective unless in writing and signed by Members holding the Units required to approve such amendment under Section 9. If any provision is held invalid or unenforceable, the remaining provisions shall continue in full force. This Agreement may be executed in counterparts, including by electronic signature, each of which shall constitute an original.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date written above.

[PARTY A NAME]
Signature: __________________________
Date: ______________

[PARTY B NAME]
Signature: __________________________
Date: ______________


EXHIBIT A — MEMBERS, CONTRIBUTIONS & UNITS

Members (Name — Address — Units — Ownership %):
{{members}}

Capital Contributions:
{{capital_contributions}}

FAQ