An operating agreement is the internal rulebook for your LLC — who owns it, who runs it, how money moves, and what happens if things change. Most states don’t legally require one, but you want it anyway, even if you’re the only owner sitting in another country.
You can write one yourself. Here’s what goes in it and why it matters more than people think.
What an operating agreement actually is
It’s a contract between the members of an LLC that governs how the company works internally. Your Articles of Organization are the public filing that creates the company with the state. The operating agreement is the private document that runs it.
Nobody files it. It lives with your company records, and you hand a copy to whoever asks — usually a bank or payment processor during onboarding.
Why a single-member non-resident LLC needs one
This is the part founders skip, and it’s a mistake. If you’re the sole owner, it feels pointless to write an agreement with yourself. It isn’t.
Three groups ask for it. Banks and fintechs — Mercury, Wise, Brex — frequently request the operating agreement during account opening to confirm who controls the company. Payment processors like Stripe and PayPal ask for it when they review a flagged account. And courts look at it when someone tries to argue your LLC is just you wearing a costume.
That last one is the real reason. The whole point of an LLC is the liability shield — the wall between your business and your personal assets. If you ever get sued and the other side can show there was no separation between you and the company, they can “pierce the veil” and come after you personally. A signed operating agreement is concrete evidence that the LLC is a real, separate entity with its own rules. For a single-member LLC, it’s one of the few documents you have that proves this.
Every state has a default LLC statute that fills in the gaps when you don’t have an agreement. Those defaults may not match what you want — on profit splits, on what happens if a member dies, on how the company dissolves. Writing your own agreement means your rules win, not the state’s generic ones.
The clauses that matter
A good operating agreement is shorter than people expect. These are the sections that earn their place.
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Members and ownership percentages
List every member and the percentage each one owns. For a single-member LLC, that’s you at 100%. For a multi-member LLC, the percentages must add up to 100 and usually track who contributed what.
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Capital contributions
Record what each member put in to start the company — cash, equipment, or services — and the dollar value. This sets the baseline for ownership and for what each member is owed if the company winds down.
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Management structure
State whether the LLC is member-managed (the owners run it) or manager-managed (you appoint a manager). Most small LLCs are member-managed. Spell out who can sign contracts, open accounts, and bind the company.
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Profit distribution
Explain how and when profits get paid out to members. It’s often pro-rata by ownership percentage, but you can structure it differently if everyone agrees. Note that distributions and tax allocations can differ.
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Voting rights
Define who votes on what and how much each vote counts. Voting power usually follows ownership percentage. Decide which decisions need a simple majority and which need unanimous consent — like admitting a new member or selling the company.
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Transfer and buyout
Set the rules for when a member wants to leave, sell their stake, or dies. A buy-sell clause says who can buy the departing member’s share, how it’s valued, and on what timeline. This prevents a co-owner from selling to a stranger you never agreed to.
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Dissolution
Lay out how the company is wound up — what triggers it, how remaining assets and debts are settled, and the order members get paid back. Boring until you need it, and then it’s the most important clause in the document.
Single-member vs multi-member
The structure is the same; the stakes are different.
| Single-member | Multi-member | |
|---|---|---|
| Main purpose | Prove separation from you personally | Govern the relationship between owners |
| Ownership section | Just you, 100% | All members, percentages summing to 100 |
| Voting clause | Simple — you decide | Critical — defines who controls what |
| Buyout clause | Optional but useful | Essential — covers exits and disputes |
| Federal tax default | Disregarded entity | Partnership |
For a single-member LLC, the agreement is mostly a formality that protects your liability shield and satisfies banks. Keep it simple. For a multi-member LLC, the agreement is the thing that stops a falling-out between owners from becoming a lawsuit. Spend more time on the voting, transfer, and buyout clauses, because those are what you’ll actually fight about later.
The split between the two structures has tax and control implications worth understanding before you write the agreement — we cover them in single-member vs multi-member LLC.
Do you need a lawyer or a notary?
Usually no, on both counts.
A standard agreement — single-member, or a simple multi-member with a clean ownership split — is a fill-in-the-blanks document. The clauses above are well-trodden. You write it, every member signs it, and it takes effect. There’s no notary, no witness requirement, and nothing to file with the state.
You’d bring in a lawyer for the genuinely unusual cases: outside investors with preferred terms, equity that vests over time, complicated profit waterfalls, or any deal where members are putting in wildly different amounts and want bespoke protections. If that’s not you, a clean template plus the right details is enough.
The most common error isn’t a missing clause — it’s an agreement that doesn’t match reality. If your operating agreement says two members own 50/50 but your bank and EIN paperwork say single-member, you’ve created a contradiction someone will eventually flag. Keep the agreement, your EIN application, and your formation documents telling the same story.
When we form your LLC, the operating agreement comes with it — drafted to match your ownership, your state, and your EIN filing, so every document lines up before a bank or Stripe ever asks.
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