The operating agreement is your LLC's internal rulebook. Most states don't require it — but skipping it is a mistake, even for a one-person company.
What it covers
- Ownership percentages and capital contributions.
- How profits and losses are split.
- Management structure and voting.
- What happens if a member leaves or the LLC dissolves.
Do you need one?
Most states don't legally require it, but banks, investors, and courts often expect it — and it reinforces your liability protection by showing the LLC is a genuine separate entity.
Single-member LLCs too
Even solo owners benefit: it documents that the business is separate from you personally, which helps preserve the liability shield.
Frequently asked questions
Is an operating agreement legally required?
In most states no, but a few require one. Regardless, it's strongly recommended for every LLC.
Can I write my own operating agreement?
Yes, many owners use a template. Complex ownership or investment situations warrant professional review.
Does a single-member LLC need an operating agreement?
It's not usually required but is highly advisable to reinforce the separation between you and the business.