An LLC operating agreement is the contract among a limited liability company’s owners (its members) that says who owns what, who makes decisions, how profits are split, and what happens when someone wants out. Every multi-member LLC should have one, even when the state doesn’t require it. This free operating agreement template is written for two or more members, with notes on adapting it for a single-member LLC.

Why does an LLC need an operating agreement if it’s already registered?

Because registering with the state and agreeing among yourselves are two separate jobs. The SBA describes articles of organization as “a simple document that describes the basics of your LLC,” such as the name, address, members and registered agent. That’s what you file with the state to form the company. The operating agreement is private, stays in your files, and covers everything the state form doesn’t.

Without one, your state’s LLC statute fills the gaps with its own default rules, which may not match what the members actually agreed over coffee. The SBA also warns that in many states, when a member joins or leaves, the LLC may have to dissolve and re-form unless there’s already an agreement in place.

A few states go further and require one. New York’s LLC Law section 417 says members “shall adopt a written operating agreement,” and allows it to be signed before, at the time of, or within 90 days after the articles of organization are filed. Check your own state’s LLC act; they differ on requirements and on the defaults they apply.

Should you use an LLC or a partnership agreement?

If you haven’t formed an entity and just want to go into business with someone, you may be a general partnership already, and our partnership agreement is written for that. The SBA’s point about LLCs is that they protect members from personal liability in most instances, which a general partnership doesn’t. If two companies are teaming up for one project without forming anything new, look at the joint venture agreement instead.

What does a multi-member operating agreement include?

Here’s what each part of our template does, in the order you’ll fill it in.

Formation details. The LLC’s name as filed, the state, the filing date, the registered agent and the principal office. Copy these from your filed articles.

Members, contributions and percentages. Who the members are, what each contributed (cash, equipment, a customer list, services), its agreed value, and each member’s percentage. Say two hypothetical friends start a mobile coffee business in Tampa: one puts in $30,000 cash, the other contributes a $12,000 espresso trailer and runs the day-to-day. They might agree on 60/40, or 50/50 with a salary for the operator. The template doesn’t assume; it asks.

Additional capital. Whether members must put in more money later. The template makes further contributions voluntary unless the members vote otherwise.

Profits, losses and distributions. How profits and losses are allocated (usually by percentage), and when cash actually gets paid out. Since a multi-member LLC is taxed as a partnership by default, each member reports their share of income on their own return, and the IRS says the partnership itself doesn’t pay income tax. That’s why the template includes an optional tax distribution to help members cover the bill.

Management. Member-managed (all members run the business) or manager-managed (one or more named managers run it). Your articles may already say which.

Voting. Ordinary decisions by majority of percentages, and a list of major decisions that need a higher threshold, like selling the business, taking on large debt, or admitting a new member.

Transfers and exits. Members can’t sell their stake to outsiders without consent, and the others get a right of first refusal. The template also covers buyouts when a member dies, becomes disabled or wants out, with a method for setting the price.

Dissolution. How the members wind the company up and in what order money goes out.

What changes for a single-member LLC?

A single-member LLC doesn’t need voting or transfer-between-members rules, but a written agreement still helps. It documents that the company is separate from you, and it can name who steps in if you can’t run it. Delete Member 2, the voting thresholds and the right of first refusal, and add a successor or designee clause. Keep the capital, management, records and dissolution sections.

How do you fill in and sign an LLC operating agreement?

  1. File your articles of organization with the state first, or at least know the exact name and filing date.
  2. Agree the numbers: contributions, percentages and distribution timing. This is the conversation that matters.
  3. Pick member-managed or manager-managed, and list the decisions that need a supermajority.
  4. Agree how a departing member’s share will be valued.
  5. Every member signs. Add a row to the signature block for each extra member.

An operating agreement is a private contract among members, so it can usually be e-signed. The federal ESIGN Act says a contract can’t be denied legal effect just because it’s electronic. What you file with the state is a separate question, and the state’s filing system decides how that’s signed. See are electronic signatures legally binding.

Download it, fill in the blanks, and send it for e-signature with any tool you like. (We’re building SignWren for exactly this; join the waitlist.)

This template and guide are general information, not legal or tax advice. For your specific LLC, talk to a lawyer licensed in your state and a tax professional.