LLC operating agreement template
Filing articles of organization creates your LLC. The operating agreement decides how it runs: who owns what, who makes decisions, how money comes out, and what happens when a member wants to leave or sell. This template is written for an LLC with two members; the steps below explain what to do if you have more, or just one. Read it below, then fill it in and have every member sign it in SignMaster.
Updated November 5, 2026 · 4 min read
The contract
Gray blanks are yours to fill in before you send. Each signer fills in the blanks in their color.
- You, before sending
- Member 1
- Member 2
LLC Operating Agreement
This Operating Agreement (the "Agreement") of LLC name (the "Company") is made on Agreement date by its members, Member 1 name and Member 2 name (each a "Member").
1. Formation
The Company is a limited liability company formed under the laws of the state of State of formation by filing articles of organization on Date articles were filed. Its principal office is at Principal office address, and its registered agent is Registered agent.
2. Purpose
The Company's purpose is Company purpose, and any other lawful business the Members approve.
3. Members, contributions and ownership
- Member 1 contributed Member 1 contribution and owns Member 1 percentage of the Company.
- Member 2 contributed Member 2 contribution and owns Member 2 percentage of the Company.
No Member must make further contributions unless all Members agree in writing. If Members contribute in different amounts later, the percentages change only by a written amendment.
4. Management and voting
The Company is Management type. If it is manager-managed, its manager is Manager name, who runs the business day to day and can be replaced by a vote of Members holding a majority of the percentages. Members vote in proportion to their percentages, and a majority decides. These decisions need every Member's written consent: admitting a new Member; selling all or most of the Company's assets; borrowing or guaranteeing more than Borrowing limit; merging or converting the Company; amending this Agreement; and dissolving the Company.
5. Profits, losses and distributions
Profits and losses are allocated to the Members in proportion to their percentages. Distributions are made when Members holding a majority decide, after keeping enough to pay the Company's debts and reasonable reserves. Where the Company has taxable profit, it will try to distribute enough each year for Members to pay the income tax on their share.
6. Taxes
The Company will be taxed as Tax classification. Tax contact will arrange the Company's tax filings and act as its representative with the tax authorities, keeping the other Members informed.
7. Bank accounts and records
The Company's money is kept in accounts in its own name and never mixed with any Member's personal funds. The Company keeps complete books and a copy of its articles, this Agreement and its tax returns, and every Member may inspect them on reasonable notice.
8. Transfers of membership interests
No Member may sell, give, pledge or otherwise transfer any part of their interest without the written consent of the other Members. Before selling to an outsider, a Member must first offer the interest to the other Members at the same price and terms, and they have First refusal days days to accept. A transfer that breaks this section is void.
9. Withdrawal, death and disability
A Member may withdraw by giving Days' notice to withdraw days' written notice. When a Member withdraws, dies or becomes permanently unable to take part in the business, the Company or the other Members may buy that Member's interest at its value, determined this way: How an interest is valued. The price is paid over Buyout payment months months. Until the purchase is complete, the departing Member or their estate receives distributions but has no vote.
10. New Members
A new Member may be admitted only with the written consent of every Member, and only after signing an agreement to be bound by this Agreement. The Members will update the percentages in section 3 by written amendment.
11. Liability and indemnification
No Member or manager is personally liable for the Company's debts or obligations just because they are a Member or manager. The Company will indemnify each Member and manager for losses from acting on the Company's behalf in good faith, except for fraud, intentional misconduct or a knowing breach of this Agreement.
12. Dissolution
The Company is dissolved when all Members agree in writing or as the law requires. It will then be wound up by paying its debts, setting aside reserves for known claims, and distributing what remains to the Members in proportion to their percentages after returning their positive capital account balances.
13. General
This Agreement is governed by the laws of the state of formation in section 1. It is the entire agreement among the Members about the Company and can be amended only in writing signed by every Member. It may be signed in counterparts and electronically, and electronic signatures count as originals.
Members' addresses
Member 1: Member 1 address
Member 2: Member 2 address
Member 1: I have read this Agreement, including the transfer limits in section 8 and the buyout terms in section 9.
Member 2: I have read this Agreement, including the transfer limits in section 8 and the buyout terms in section 9.
Member 1
Member 2
Opens it in SignMaster as a template you can edit and send.
A starting point, not legal advice. Have a lawyer review it for your state and situation.
On this page
Do you need an operating agreement?
Most states don't make you file one, but you should have one. A few states require it: New York, for example, says members must adopt a written operating agreement within 90 days after the articles are filed. Banks often ask for it before opening a business account, and it's the document that shows the LLC is a separate business rather than an extension of its owners. Without one, your state's LLC law sets the rules, and its defaults may not match your deal.
A single-member LLC benefits too: the agreement shows the business is run separately from you, which helps keep the liability protection the LLC was formed for.
What the template covers
- Formation: the LLC's name, the state where it was formed, the filing date, its office and registered agent.
- Members and contributions: what each member put in, and each member's ownership percentage.
- Management: member-managed or manager-managed, voting by percentage, and the major decisions that need everyone.
- Profits and distributions: shared by percentage, with tax distributions so members can pay tax on their share.
- Taxes: partnership treatment by default for a multi-member LLC, and who handles the tax return.
- Transfers: no selling a share to an outsider without consent, and a right of first refusal for the other members.
- Leaving, death and disability: a buyout at a set valuation, paid over time.
- Liability and dissolution: members aren't personally liable for LLC debts just for being members; how the LLC winds up.
Mistakes that weaken an LLC
- Mixing personal and business money. Paying personal bills from the LLC account invites a court to ignore the liability shield.
- Downloading a single-member template for two owners. A two-member LLC needs voting, deadlock and buyout terms.
- Ownership by verbal agreement. Write each member's percentage down and update it when someone contributes more.
- No transfer rules. Without them, a member's share could end up with a stranger or an ex-spouse.
- Never updating it. Sign an amendment when members, percentages or management change.
Taxes follow your election, not this document
By default, the IRS taxes a multi-member LLC as a partnership and a single-member LLC as a disregarded entity. An LLC can elect to be taxed as a corporation instead by filing a form with the IRS. Section 6 records what you chose; your accountant should confirm it.
How to send it with SignMaster
- 1
Open the template
Press Use this template to open it in SignMaster with two member signers. For three or more members, or a single member, copy the text from the preview above into your own document, change the member lines in section 3, and upload it as a new template.
- 2
Copy details from your filing
Type the LLC's exact name, state, filing date and registered agent into the gray blanks, as they appear on the articles of organization. Then add contributions, percentages and the management choice.
- 3
Send it to every member at once
Add each member's name and email and let them sign at the same time. Each member writes in their own address and confirms they've read the transfer and buyout sections. Reminders chase anyone who hasn't signed.
- 4
File it with the company records
When the last member signs, each one receives the signed PDF and its certificate of completion. You don't file it with the state; keep it with your articles, EIN letter and bank paperwork, and bring a copy when you open the business account.
Who fills in what
Whoever prepares the agreement, often the member who filed the LLC, fills in the gray blanks: the company details, contributions, percentages, management and buyout terms. Each member fills in only their own blanks, their address and the box confirming they've read sections 8 and 9, then signs. If members are in different states, nobody has to print, scan or mail anything.
Questions? Answers.
Is an LLC operating agreement legally required?
In a few states, including New York, yes. In most it's optional but strongly advised, because banks ask for it and it replaces the state's default rules with your own.
Do I file the operating agreement with the state?
Usually not. It's an internal document. Keep the signed copy with the LLC's records and give each member a copy.
Can LLC members sign the operating agreement electronically?
Yes, in general. Federal and state e-signature laws treat electronic signatures on business agreements like this as valid. Section 13 also says so. See are electronic signatures legal.
What's the difference between member-managed and manager-managed?
In a member-managed LLC the owners run it. In a manager-managed LLC, the members appoint one or more managers to run it day to day and vote only on major decisions.