Operating Agreement
(Member-Managed, Multiple Members) (LLC)

Summary

This template is an Operating Agreement for a member-managed limited liability company with multiple members. This template includes practical guidance, alternate and optional clauses, and drafting notes. Notwithstanding the significant and important role an operating agreement can play in the management and operation of an LLC, very few jurisdictions mandate the adoption of an operating agreement. See the image below to see which states mandate the adoption of an operating agreement. Visualization of the Map of States Requiring Operating Agreements Source: Operating Agreement and Initial Filing Requirements State Law Survey (LLC), Current as of 06/06/2025 Operating agreements may be written or verbal, and while most jurisdictions allow either, some jurisdictions require operating agreements be in writing. See the image below to see which states require the use of a writing or some other template. Visualization of the Map of States Requiring Operating Agreements Be Written Source: Operating Agreement and Initial Filing Requirements State Law Survey (LLC), Current as of 06/06/2025 This template is not state-specific, so counsel should consult the limited liability company statute of the state in which the LLC was formed and revise this template as necessary to conform to local requirements and client wishes. Many states do not require LLCs to have a written operating agreement or to have an operating agreement at all. However, most states' LLC statutes provide default rules for the operation of an LLC and such rules can be changed or overridden by contract. Great latitude is generally afforded to limited liability companies in their internal management and economic matters. A written operating agreement is therefore strongly recommended to memorialize an LLC's management, financial, and other arrangements. In using this template, careful consideration should be given to the particular needs of a given enterprise. Counsel is advised to consult with the LLC's tax and/or accounting service providers to ensure the tax and accounting provisions are appropriate for the LLC. This template has been updated as needed to reflect the revised Internal Revenue Code provisions governing IRS tax audits of partnerships and other entities taxed as partnerships; these rules were passed in the Bipartisan Budget Act of 2015 and took effect on January 1, 2018. For further information, see Partnership Tax Audit Rules. See also Partnership and Other Pass-Through Entities Taxation and Partnership Tax Audit Clauses (Bipartisan Budget Act of 2015). For a full listing of key content covering the taxation of pass-through business entities such as partnerships, limited liability companies (LLC) and S corporations, see Partnership and other Pass-Through Entities Taxation Resource Kit. To compare state laws on Operating Agreements, see the following topics in the Business Entities State Law Comparison Tool : Limited Liability Company: Formation and Qualification and Limited Liability Company: Management and Indemnification.