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LLC Operating Agreement template

An operating agreement is the internal rulebook of a limited liability company. It records who owns the company, how it is managed, how profits are distributed, and how members can join or leave.

Replace everything in [BRACKETS], export to PDF, then send it for signature.

1. Formation

This Operating Agreement (the "Agreement") of [COMPANY NAME] (the "Company") is entered into on [DATE] by its members listed in Schedule A (each a "Member"). The Company was formed on [FORMATION DATE] by filing its formation document with [REGISTRY OR AUTHORITY] under the laws of [JURISDICTION OF FORMATION].

2. Name, Purpose, and Office

The Company's name is [COMPANY NAME]. Its purpose is to [DESCRIBE BUSINESS] and to engage in any lawful activity. Its principal office is at [OFFICE ADDRESS], and its registered agent is [REGISTERED AGENT NAME AND ADDRESS].

3. Members, Capital, and Ownership

Each Member's name, initial capital contribution, and percentage interest ("Percentage Interest") are set out in Schedule A. No Member is required to make additional contributions unless approved by [Members holding a majority / all Members]. No Member may withdraw capital without the consent of [the Members], and no interest is paid on contributions.

4. Allocations and Distributions

Profits and losses are allocated among the Members in proportion to their Percentage Interests, subject to applicable tax rules. Distributions of available cash will be made [FREQUENCY] at the discretion of [the Managers / Members holding a majority of Percentage Interests], after reserving amounts reasonably needed for operations. [OPTIONAL: The Company will distribute enough cash to cover Members' estimated taxes on their allocated profits, where funds allow.]

5. Management

The Company is [CHOOSE ONE: member-managed, with each Member having authority to act for the Company in the ordinary course of business / manager-managed by MANAGER NAME(S), who shall manage day-to-day operations]. The following actions require the approval of Members holding at least [PERCENT]% of Percentage Interests: admitting new Members; selling substantially all assets; merging or converting the Company; incurring debt above [AMOUNT]; and amending this Agreement.

6. Meetings and Voting

Members vote in proportion to their Percentage Interests. Meetings may be called by [any Member / Members holding PERCENT%] with [NOTICE PERIOD] notice and may be held in person or by video. Any action may be taken without a meeting by written consent, including electronically signed consent, of Members holding the required percentage.

7. Transfer of Interests

No Member may sell, assign, or pledge any part of its interest without the prior written consent of [the other Members / Members holding PERCENT%]. Before transferring to a third party, a Member must first offer its interest to the Company and then to the other Members on the same terms (right of first refusal), who shall have [DAYS] days to accept.

8. Withdrawal, Death, or Disability

A Member may withdraw on [NOTICE PERIOD] written notice. On a Member's withdrawal, death, disability, or bankruptcy, the Company [shall / may] buy that Member's interest at fair market value determined by [VALUATION METHOD], paid [PAYMENT TERMS]. Until purchased, the transferee holds only economic rights and no voting rights.

9. Liability and Indemnification

No Member or Manager is personally liable for the debts or obligations of the Company solely by reason of being a Member or Manager, except as required by law. The Company shall indemnify each Member and Manager for losses arising from acts performed in good faith on the Company's behalf, except for fraud, gross negligence, or willful misconduct.

10. Books, Records, and Tax

The Company shall keep complete books and records at its principal office, open to inspection by any Member on reasonable notice. The fiscal year ends on [FISCAL YEAR END]. The Company shall be taxed as [TAX CLASSIFICATION] unless the Members decide otherwise.

11. Dissolution

The Company dissolves upon [the vote of Members holding PERCENT% / DISSOLUTION EVENTS] or as required by law. On dissolution, the Company shall wind up its affairs, pay its creditors, and distribute remaining assets to the Members in accordance with their positive capital accounts or Percentage Interests.

12. Governing Law and General Terms

This Agreement is governed by the laws of [GOVERNING LAW JURISDICTION]. It is the entire agreement among the Members regarding the Company, may only be amended in writing approved as required above, and is binding on the Members' successors. If any provision is unenforceable, the rest remains in effect.

13. Signatures and Schedule A

The Parties agree that this Agreement may be signed electronically and in counterparts, and that electronic signatures have the same effect as handwritten signatures. MEMBER: [MEMBER 1 NAME] Signature: ____________________ Date: [DATE] MEMBER: [MEMBER 2 NAME] Signature: ____________________ Date: [DATE] SCHEDULE A — MEMBERS [MEMBER 1 NAME] — Contribution: [AMOUNT OR PROPERTY] — Percentage Interest: [PERCENT]% [MEMBER 2 NAME] — Contribution: [AMOUNT OR PROPERTY] — Percentage Interest: [PERCENT]%

When to use this template

  • When forming a new LLC or similar limited-liability company with one or more members
  • When a bank, investor, or partner asks to see the company's governing document
  • When adding a new member or changing ownership percentages
  • When you want to override default statutory rules on management and distributions

How to fill it in and get it signed

  1. Enter the company name, formation date, jurisdiction of formation, office, and registered agent.
  2. Complete Schedule A with each member's contribution and percentage interest.
  3. Choose member-managed or manager-managed and set the voting thresholds for major decisions.
  4. Set the transfer restrictions, buyout valuation method, and dissolution triggers.
  5. Fill in the governing law and tax classification, then send the agreement to every member for e-signature via eSignSimple.

This template is general information, not legal advice. Laws differ by country and state; have a lawyer review contracts with high stakes.

Frequently asked questions

Does a single-member LLC need an operating agreement?

Some jurisdictions don't require one, but a written agreement helps show the company is separate from its owner and is often requested by banks. Many single-member LLCs adopt one anyway.

What is the difference between member-managed and manager-managed?

In a member-managed LLC, the owners run the business directly. In a manager-managed LLC, the members appoint one or more managers to handle operations while members vote only on major decisions.

Is an operating agreement filed with the state?

Usually not. The formation document is filed with the registry, while the operating agreement is an internal document kept with the company's records.

Can LLC members sign the operating agreement electronically?

In many jurisdictions, yes. eSignSimple lets you send the agreement to all members, who can sign without creating an account, and records an audit trail for each signature.