LLC Operating Agreement template

Free LLC operating agreement template

To get your business off to a great start, a solid LLC operating agreement is your most important playbook. It clearly defines roles and procedures to prevent future headaches and misunderstandings to make sure all members are on the same page. If you don’t have an LLC operating agreement in place, your state default rules will dictate how your business operates.

So take control and establish the specific rules for your business with Docusign’s LLC operating agreement template. With our Limited Liability Company document, you can easily create, edit, finalize, and store a secure record of this foundational document, ensuring all members are protected. Take the first step towards a well-run business by getting started with a free Docusign account or clicking on the below LLC template below:

Taking the proactive step to create an LLC operating agreement is key to starting your business off right. This document puts your business on a solid foundation by establishing clear roles and procedures to avoid issues down the road. With Docusign, you can easily create, sign, and store a secure record that protects all members. Ready to formalize your business structure? Get started with a free Docusign account today.

What is an LLC operating agreement?

An LLC operating agreement is a legal document that outlines the ownership structure, management responsibilities, and operational procedures of a limited liability company (LLC). It governs how the LLC is run, how profits and losses are distributed, and what happens if a member leaves or the business dissolves. While some states don’t require LLCs to have an operating agreement, having one is highly recommended to prevent disputes and protect members’ personal liability.

When do you need an LLC operating agreement?

You need an operating agreement when:

• Forming a new LLC, to legally document ownership percentages, management roles, and voting rights

• Adding new members, to clearly outline responsibilities and profit distribution

• Establishing financial procedures, including contributions, distributions, and handling company debts

• Planning for potential disputes, buyouts, or dissolution scenarios

Even single-member LLCs benefit from an operating agreement, as it clarifies the separation between personal and business assets, which helps maintain limited liability protection (Investopedia).

What should be included in an LLC operating agreement?

A comprehensive operating agreement typically includes:

Company information

• Name of the LLC

• Principal office address

• State of formation

• Date of formation

• Registered agent and office

Members

• Names and addresses of all members

• Initial capital contributions of each member

• Percentage ownership or membership interests

Purpose

• Description of the business purpose and permissible activities

Term

• Duration of the LLC’s existence

Management structure

• Whether the LLC is member-managed or manager-managed

• Powers, rights, and duties of members or managers

• Decision-making and voting procedures

Allocations and distributions

• How profits, losses, and distributions are shared among members

Meetings and records

• Frequency and procedures for meetings

• Record-keeping requirements

Bank accounts and fiscal year

• Procedures for company funds

• Fiscal year designation

Transfer of membership interests

• Restrictions and process for transferring ownership interests

• Admission of new members

Dissolution and winding up

• Events that trigger dissolution

• Distribution of assets upon winding up

Amendments

• Procedures for modifying the agreement

Severability and governing law

• Handling invalid provisions

• State law governing the agreement

Signatures

• Execution by all members with dates

Additional (optional) parts

While not strictly required, these additional provisions can provide clarity and further protect the LLC and its members:

• Indemnification: Protection for members or managers against certain liabilities

• Compensation and reimbursement: Rules for compensating members or managers and reimbursing business expenses

• Buy-sell provisions: Procedures for handling a member’s exit, death, or incapacity

• Dispute resolution: Mediation or arbitration clauses for resolving conflicts

• Non-compete and confidentiality: Restrictions on members’ activities outside the LLC

• Succession planning: Procedures for transferring interests in the event of a member’s death

• Tax treatment: Election of partnership or corporate tax status, if applicable