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Free LLC Operating Agreement Generator

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What Is an Operating Agreement?

Internal Governing Document

An operating agreement is a legal document that outlines how your LLC is owned, managed, and operated. It defines the rights and responsibilities of all members and establishes rules for decision-making, profit sharing, and dispute resolution.

Protects Limited Liability

Without an operating agreement, courts may not fully recognize the separation between you and your LLC. This document strengthens the "corporate veil" that protects your personal assets from business debts and lawsuits.

Prevents Member Disputes

By clearly defining ownership percentages, profit distribution, voting rights, and exit procedures in advance, an operating agreement prevents misunderstandings and costly disputes between members down the road.

Required by Banks

Most banks require a copy of your operating agreement to open a business bank account. It proves who has authority to manage the LLC's finances and sign on behalf of the company. Without one, you may be unable to obtain business banking or credit.

States That Require an Operating Agreement

While every LLC should have an operating agreement, the following states legally require one:

California

Required by statute

Delaware

Required by statute

Maine

Required by statute

Missouri

Required by statute

New York

Required within 90 days

Even if your state does not require one, having an operating agreement is strongly recommended by attorneys and the IRS to establish your LLC as a separate legal entity.

Frequently Asked Questions