Free LLC Operating Agreement Template

An LLC operating agreement is a legal document that explains how your limited liability company is structured and managed. It outlines who owns the business, how profits are shared, how decisions are made, and what happens if someone wants to leave.

This agreement helps separate your personal assets from your business activities and reduces the risk of internal conflicts. It’s often required by banks, investors, and even some state laws.

While your articles of organization officially form your LLC with the state, the operating agreement sets the internal rules for how your business operates.

Even if your state doesn’t legally require one, having an operating agreement is still a smart move. It gives your business structure, protects your personal liability, and helps clarify ownership and financial responsibilities.

Many banks won’t let you open a business account without one. And if your LLC has more than one member, it can prevent disagreements by spelling out how decisions are made and profits are shared.

Some states, including California, New York, and Missouri, require LLCs to have a signed operating agreement.

Document Genius makes it easy to create a legally valid LLC operating agreement with just a few steps:

1. Choose your LLC type: Select whether you’re forming a single-member or multi-member LLC.
2. Enter your company details: Add your business name, address, formation date, and registered agent information.
3. Define ownership and structure: List the members, their ownership percentages, and any initial capital contributions.
4. Set the rules: Customize how your LLC will handle profits, losses, voting rights, member changes, and dissolution.
5. Review your state-specific requirements: Our builder includes any mandatory clauses your state may require.
6. Download and sign: Once finished, download your agreement as a Word or PDF file, sign it, and store it with your business records.

If you’re writing your operating agreement manually or making changes to an existing one, here are the main sections to include:

• Business information: Include your LLC’s legal name, address, and the purpose of the company. Add your registered agent’s name and address as well.
• Member ownership: List each member (owner) and how much of the business they own, often stated as a percentage.
• Capital contributions: Record what each member is contributing to the business (e.g., cash, property, or services).
• Profit and loss distribution: Explain how profits and losses will be shared. This is usually based on ownership percentage, but you can set different terms.
• Roles and responsibilities: Clarify whether the LLC is member-managed or manager-managed, and define each person’s role.
• Voting rules: Describe how decisions are made, such as which actions require a majority or unanimous vote.
• Changes to membership: Include steps for adding or removing members and how ownership transfers work.
• Exit and dissolution terms: Explain what happens if the LLC closes, a member leaves, or the business is sold or merged.

Keep your language simple and direct. The goal is to make expectations clear and protect everyone involved.