Create an LLC Operating Agreement in Minutes

An operating agreement is the internal contract among the members (owners) of a limited liability company that sets the rules for how the LLC is owned, run, and wound down. It records who the members are, what percentage each one owns, how much capital they contributed, and how profits and losses are shared.

Think of it as your LLC’s rulebook. Where your articles of organization simply create the company with the state, this agreement governs the day-to-day relationship between owners — who decides what, how money moves, what happens when a member leaves, and how the company can be dissolved.

Even a single-member LLC benefits from an operating agreement: it proves the company is a separate legal entity from its owner, which helps preserve the limited-liability protection that is the whole point of forming an LLC.

In a member-managed LLC, the owners run the company themselves — every member has a say in daily operations and signs off on decisions. This is the default in most states and fits small companies where all the owners are actively involved.

In a manager-managed LLC, the members appoint one or more managers — who may or may not be owners — to handle operations, while the members stay passive and vote only on major decisions. This suits LLCs with investor members, larger ownership groups, or owners who want to delegate management.

Your operating agreement should state clearly which structure you use and exactly what powers the managers or members hold. The generator supports both — just describe how you actually run the business and it structures the management and voting clauses to match.

A strong agreement does far more than name the owners. These are the core clauses the generator includes by default, and the ones the AI review checks for:

Members and ownership percentages. The document names each member and the percentage of the LLC they own — the foundation for voting power and profit allocation.

Capital contributions. It records what each member contributed to start the LLC (cash, property, or services) and whether members must contribute more later.

Allocation of profits and losses. This clause sets how profits and losses are divided — usually in proportion to ownership, but you can choose a custom split.

Management and voting. It defines whether the LLC is member-managed or manager-managed, what decisions need a vote, and the thresholds (majority, supermajority, or unanimous) for approving them.

Transfers and buy-sell. This clause explains whether members can sell their stake, and what happens if a member exits, divorces, becomes disabled, or dies — preventing disputes before they start.

Dissolution. Finally, it sets out how the LLC can be wound down and how remaining assets are distributed, with signature blocks that make the operating agreement binding once every member signs.

It is strongly recommended, and a few states require it. Even with one owner, a single-member operating agreement proves your LLC is a separate legal entity, which helps keep your personal assets protected if the business is ever challenged in court.

Banks frequently ask for an operating agreement before they open a business account, and investors or lenders may want to see one too. Creating a single-member operating agreement now is a small step that strengthens the limited-liability shield you formed the LLC to get.

Yes — many founders and partners create their own operating agreements, especially for straightforward LLCs. The key is to be specific: list the members and their ownership, document capital contributions, choose a management structure, and spell out how profits, voting, and member exits work.

That is exactly what this operating agreement generator is built for. Instead of copying a template you do not fully understand, you describe your real LLC and get a draft tailored to it, then refine it clause by clause in the editor. For complex ownership, outside investors, or large assets, having a lawyer review your operating agreement before signing is worth the extra confidence.

By default, an operating agreement splits profits and losses in proportion to each member’s ownership percentage. If one member owns 60% and another 40%, profits and losses follow the same split unless you say otherwise.

But you can also set a custom allocation — for example, rewarding a member who contributed more capital or does more of the work — and define when distributions are paid out versus reinvested. The generator records exactly how profits, losses, and distributions work so there are no surprises at year-end.