A free LLC operating agreement template you can copy, plus a clause-by-clause guide: ownership, capital, profit splits, management, transfers, and dissolution.
By Omer Aydin ·
An LLC operating agreement is the internal contract that defines who owns the company, how profits are split, who makes decisions, and what happens when a member leaves. No state requires you to file it, but banks, investors, the IRS, and courts will ask for it — and without one, your state's default LLC statute decides every disputed question for you. Below is a free template you can copy and adapt, followed by a clause-by-clause explanation.
One honest note before the template: a copied agreement covers the standard cases well. If you have multiple members with unequal contributions, outside investors, or complex profit splits, have a lawyer review the final document. This guide is information, not legal advice.
Copy the structure below into a document and replace the bracketed placeholders. It works for single-member and multi-member LLCs; delete the sections that don't apply.
This Operating Agreement (the "Agreement") of [LLC NAME], a limited liability company organized under the laws of the State of [STATE] (the "Company"), is entered into as of [DATE] by the member(s) listed in Exhibit A. The Company was formed by filing its [Articles of Organization / Certificate of Formation] with the [STATE] Secretary of State on [FILING DATE]. The Company's registered agent is [AGENT NAME AND ADDRESS]. The Company's purpose is to engage in any lawful business activity.
The members of the Company and their respective membership interests are set forth in Exhibit A. Membership interests are expressed as percentages and total one hundred percent (100%).
For a single-member LLC: "The sole member of the Company is [NAME], who holds one hundred percent (100%) of the membership interests."
Each member has contributed to the Company the cash, property, or services described in Exhibit A. No member is required to make additional contributions without that member's written consent. No member is entitled to interest on, or the return of, any capital contribution except as provided in this Agreement.
Profits and losses shall be allocated among the members in proportion to their membership interests. Distributions shall be made at the times and in the amounts determined by [the members holding a majority of membership interests / the Manager], in proportion to membership interests. No distribution shall be made if it would render the Company unable to pay its debts as they become due.
Choose one:
(Member-managed) The Company shall be managed by its members. Each member is authorized to act on behalf of the Company in the ordinary course of business. The following actions require the approval of members holding at least [a majority / two-thirds / all] of the membership interests: borrowing money, selling substantially all assets, admitting a new member, amending this Agreement, and dissolving the Company.
(Manager-managed) The Company shall be managed by one or more managers. The initial manager is [NAME]. The manager has authority over day-to-day operations. The actions listed in Exhibit B require member approval.
The Company shall keep complete books and records at its principal office. The Company's fiscal year is the calendar year. The members intend that the Company be taxed as a [disregarded entity / partnership / S-corporation / C-corporation], and the [member / manager] is authorized to make any necessary tax elections.
No member may sell, assign, or transfer any membership interest without the prior written consent of the other members, except transfers to a revocable living trust for the member's benefit. Before transferring to a third party, the transferring member shall first offer the interest to the remaining members on the same terms (right of first refusal), who shall have thirty (30) days to accept.
Upon a member's death, incapacity, bankruptcy, or withdrawal, the Company shall continue, and the remaining members may purchase the departing member's interest at fair market value as determined by [an independent appraiser / the formula in Exhibit C]. The Company shall dissolve upon the written consent of members holding [all / two-thirds] of the membership interests, and its affairs shall be wound up as required by the laws of the State of [STATE].
This Agreement is the entire agreement among the members regarding the Company and may be amended only in writing signed by all members. It is governed by the laws of the State of [STATE]. If any provision is held invalid, the remainder shall continue in effect.
Signatures: [Each member signs and dates, with name printed.]
Exhibit A: Members, contributions, and percentage interests.
It feels redundant to sign a contract with yourself, but a single-member operating agreement does three jobs: banks request it when opening the account, it documents that the LLC is a genuinely separate entity (which supports your liability shield if you are ever sued), and it states what happens to the company if something happens to you.
No state requires you to file one, and only a handful (including New York, Missouri, and Maine) require you to have one at all. Practically, it is required anyway: banks, lenders, payment processors, and investors routinely ask for it.
No. It is effective once all members sign it. Notarization is optional and adds little; keep the signed copy with your formation documents.
Yes — the template above covers the standard single-member and simple multi-member cases. Bring in a lawyer when there are unequal contributions, vesting between co-founders, outside investors, or industry-specific licensing rules.
Your state's default LLC statute governs. Defaults are often not what founders would choose — for example, some states split profits equally regardless of how much each member contributed, and default exit rules can force awkward outcomes when a member leaves.
No. It is a private internal document. The state only has your Articles of Organization (or Certificate of Formation in Delaware); the operating agreement stays in your records.
By written amendment signed by the members, following the amendment rule in the agreement itself (the template requires all members to sign). Keep every amendment with the original.
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