What Is an LLC Operating Agreement? And What Should You Include in One?

What an operating agreement should include

An operating agreement should outline voting rights, member responsibilities, and even meeting frequency. While many states do not require any particulars, it's wise to make an agreement that's specific to your needs.

These items can help you clearly explain each part of your business and prove its legitimacy, although your operating agreement will depend on the size of your LLC, your expansion plans, and more.

1. Name and address of your LLC

Include the legal name of the LLC and its registered address. Depending on your state, you might need to add the words “Limited Liability Company" or “LLC" to your company's official name. Most states require that your company's address must:

• Be able to receive mail
• Be permanent and not a P.O. box

2. LLC articles of organization

File articles of organization with the secretary of state in the state where your business is based. Include this document in your operating agreement to:

• Verify the business's legitimacy
• Prove the founding date

3. Purpose of your LLC

This is the intention of your company. What does your business hope to accomplish? You'll answer this question when writing your business purpose. A purpose statement usually includes:

• An overview of what the business does
• The state where the business operates

Once you file articles of organization with the secretary of state, you can move ahead with writing your operating agreement. The filing fee for the articles ranges from less than $100 to more than $500, depending on your state. 

How do I get an operating agreement?

To get an operating agreement, you can write it yourself, check out a sample operating agreement, or hire help to write it for you. You’ll file this document internally since it governs most of your organization from top to bottom. Make a checklist with these steps before drafting your agreement:

File articles of organization 

Once you file articles of organization with the secretary of state, you can move ahead with writing your operating agreement. The filing fee ranges from less than $100 to more than $500, depending on your state. 

Write the operating agreement

Follow the steps above to craft an operating agreement that addresses your LLC's exact needs. Once you've completed the operating agreement, you'll need to ensure member consensus.

Sign the document

Each member should sign the agreement to indicate the validity and help your operating agreement's credibility if it is ever questioned.

File the operating agreement securely

When filing your operating agreement, make copies and distribute them to any members. Nonmembers are not required to see the operating agreement.

Operating agreement FAQs

Don't get hung up on these common questions about LLC operating agreements.

Is an operating agreement required?

Not in every state. Five states require that LLCs operating agreements: California, Delaware, Missouri, New York, and Maine. Still, it's a good idea to maintain an operating agreement within your own files, regardless of which state you live in.