# What is an LLC operating agreement? Source: https://joinopenfile.com/guides/operating-agreement Index: https://joinopenfile.com/llms.txt An LLC operating agreement is the private document that says who owns the company, how decisions get made and what happens when an owner leaves. You usually don't file it with the state. California and New York require one, and it's worth having everywhere else because it replaces your state's default rules. Updated November 1, 2026 ## Do you need one? It depends on the state. New York's LLC law says members shall adopt a written operating agreement, and it can be signed before filing or within 90 days after. California's Secretary of State says an operating agreement is required and is kept where the company's records are. Arizona's state instructions say one isn't required by statute. The SBA recommends having one even if your state doesn't ask. Banks have their own reasons to want it: the SBA lists ownership agreements among the documents they commonly request. ## What happens without one Your state's default rules fill the gap, and they may not be what you'd choose. In Delaware, control follows profit interests, and members owning more than 50 percent decide. In California, each member of a member-managed LLC has equal rights and a majority of members decides ordinary matters. Two California owners who put in 70 and 30 percent would each have one vote unless they agree otherwise. The SBA also warns that when a member joins or leaves, some states may require the LLC to be dissolved and re-formed. An agreement that covers ownership changes can avoid that. ## What to put in it Cover these in plain words. Owners. Who owns what, and what each person put in. Money. How profits and losses are split, and when cash gets paid out. Decisions. Who runs the company, what needs a vote and how a tie gets broken. [Managing members](https://joinopenfile.com/guides/managing-member) explains the roles. Changes. How someone joins, leaves or sells, what happens if an owner dies, and how a share gets valued. Closing. How the company ends and who gets what. ## If you're the only owner You have no partners to disagree with, and the document still helps. It shows a bank who can sign. It records that you and the company are separate. That matters if anyone ever argues otherwise. It also says who takes over if something happens to you. ## Other names for it Delaware calls it a limited liability company agreement. Texas calls it a company agreement. Delaware's law even counts oral and implied agreements, and it binds members who never signed. A written agreement is still the one you can actually show to a bank or a court. ## How to get one done You can write your own, use a template, or have us [draft one for your company](https://joinopenfile.com/pricing). Use an attorney if ownership is uneven, if investors are involved or if the profit split is complicated. Sign it, keep it with your company records and update it when owners or terms change. ## Questions Do I file the operating agreement with the state? Usually no. California's Secretary of State says the LLC keeps it at the office where its records are kept and doesn't file it. Is an operating agreement the same as articles of organization? No. Articles are filed with the state and create the company. The operating agreement stays private and sets the rules between owners. Does every member have to sign? It's best if they do. Delaware law binds a member even without a signature, but signatures stop arguments about what was agreed. Can I write one after forming the LLC? Yes in most states, and sooner is better. New York sets a window of 90 days after the articles are filed. A bank may ask for it before opening your account. Can I change it later? Yes. Follow the amendment steps the agreement sets out. If it doesn't have any, your state's default rules decide who has to agree, so write those steps in. [Start my business](https://joinopenfile.com/start) $0 + state and processing fees. Takes seconds. ## Sources - [New York LLC Law section 417](https://www.nysenate.gov/legislation/laws/LLC/417) - [California Secretary of State: Business entity types](https://www.sos.ca.gov/business-programs/business-entities/starting-business/types) - [California Corporations Code section 17704.07](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP§ionNum=17704.07) - [Delaware LLC Act, section 18-402](https://delcode.delaware.gov/title6/c018/sc04/index.html) - [SBA: Choose a business structure](https://www.sba.gov/business-guide/launch-your-business/choose-business-structure) ## Keep reading - [What are articles of organization?](https://joinopenfile.com/guides/articles-of-organization) - [What is a managing member of an LLC?](https://joinopenfile.com/guides/managing-member) - [How to start an LLC](https://joinopenfile.com/guides/how-to-start-an-llc)