LLC Operating Agreement: What It Is and Who Signs It

An LLC operating agreement is the internal contract among an LLC's members. It sets out ownership percentages, how profits and losses get allocated, who manages the company, how decisions get made, and what happens when a member leaves, dies, or wants to sell. It is not filed with the state. It stays in your records as the governing document for how the business actually runs.

Last updated July 2026.

What is an LLC operating agreement?

An LLC operating agreement is a written contract signed by the members of a limited liability company that governs ownership, money, management, and the rules for changes. It overrides the default rules your state would otherwise impose. Even a one-owner LLC uses one to document how the business operates and who controls it.

Think of it as the rulebook the members agree to before any money moves. Without it, your state's default LLC statute fills the gaps, and those defaults rarely match what the owners actually intended. Two people who each put in different amounts of cash, for example, may split profits 50/50 under a default rule they never wanted. The agreement is where you write down the real deal.

Is an operating agreement required by law?

It depends on your state. A handful of states require LLCs to have an operating agreement, and two of them, California and New York, specifically require a written one. Delaware, Maine, and Missouri require an agreement but allow it to be oral, written, or implied. Most other states do not mandate one at all, though every LLC benefits from having one.

New York has the most specific rule: members must adopt a written operating agreement at the time of filing the articles of organization, before filing, or within 90 days after filing. The document is still kept internally and is not submitted to the Department of State. Because state law changes and requirements vary, confirm your own state's rule with your Secretary of State before you rely on any list. If your state is not one of the ones named above, treat the agreement as strongly recommended rather than skippable.

One point worth repeating: operating agreements are generally not filed with the state. They are private records held by the LLC and its members. You keep signed copies with your company books, not on the public record.

Who signs an LLC operating agreement?

Every member of the LLC signs the operating agreement. In a member-managed LLC, that is all the owners. In a manager-managed LLC, the members still sign, and any non-member managers may sign an acknowledgment of their duties. New members who join later sign the current agreement or a joinder that binds them to it.

Signatures matter because the agreement is a contract among the people signing it. A draft nobody signed is hard to enforce if members later disagree. If your LLC has five owners, you want all five signatures on the same executed version, not a stack of separate PDFs that may not match. This is different from a general partnership, where the partners sign a partnership agreement instead, but the principle is the same: get every principal onto one final document.

Does a single-member LLC need an operating agreement?

Yes, in practice. A single-member LLC is not required to have one in most states, but having a signed operating agreement helps show the LLC is a separate legal entity from its owner. That separation is what supports your limited liability protection. Banks, lenders, and investors also frequently ask to see one before opening an account or funding the business.

The liability shield depends on treating the LLC as its own entity rather than an extension of your personal finances. A signed operating agreement is one piece of that. The other piece is behavior: keep a dedicated business bank account from day one, and at tax time you can convert the PDF statements into a clean spreadsheet instead of retyping them. Mixing personal and business money, known as commingling, is exactly what lets a court disregard the LLC and reach your personal assets. A tidy agreement plus clean books is cheap insurance.

What should an LLC operating agreement include?

A complete operating agreement covers who owns the company, who runs it, how money flows, how decisions get made, and what happens when things change. The clauses below are the standard backbone. Skipping any of them means falling back on state defaults, which is usually not what the owners want.

Section	What it covers	Why it matters
Members and ownership percentages	Who the members are and each member's ownership stake	Defines who owns what and sets the baseline for votes and payouts
Capital contributions	Cash, property, or services each member contributes, and whether more can be required	Records who put in what and prevents disputes over funding later
Profit and loss allocation and distributions	How profits and losses are split and when money is paid out	Controls who gets paid, how much, and when, independent of ownership if you choose
Management structure	Member-managed or manager-managed, and the powers of each role	Establishes who has authority to act for and bind the company
Voting rights and thresholds	Voting power per member and what percentage approves ordinary versus major decisions	Prevents deadlock and clarifies which actions need supermajority or unanimous consent
Transfer restrictions and buy-sell provisions	Rules for selling a stake, rights of first refusal, and buyout terms on exit, death, or divorce	Keeps unwanted parties out and gives a clear path when a member leaves
Dissolution	How and when the LLC winds down and distributes remaining assets	Provides an orderly exit and avoids fights over what is left
Amendment procedure	The vote and process needed to change the agreement	Lets the document evolve without one member blocking or forcing changes
Indemnification	When the LLC covers members or managers for claims tied to their role	Protects the people running the company for good-faith decisions

The management structure choice deserves its own quick comparison, because it drives who can legally act for the company.

Question	Member-managed	Manager-managed
Who runs day-to-day operations	The owners themselves	Designated managers, who may or may not be members
Best fit for	Small LLCs where every owner is hands-on	LLCs with passive investors or many owners
Who can bind the company	Any member	Only the managers

Does an operating agreement need to be notarized?

No. An operating agreement generally does not need to be notarized to be valid or enforceable. What makes it binding is that the members agreed to its terms and signed it. Notarization only verifies identity and the fact of signing, and it is not what gives the document legal force.

Some members choose to have signatures notarized anyway, usually for extra proof of who signed if the agreement is ever challenged. That is a comfort measure, not a legal requirement. A clear signing process with dated signatures from every member accomplishes the same goal in most cases.

Can an LLC operating agreement be signed electronically?

Yes. Electronic signatures on an operating agreement are valid under the federal ESIGN Act and state UETA laws, which give an e-signature the same legal standing as ink on paper. For the details on why that holds up, see our explainer on whether electronic signatures are legally binding. For most LLCs, signing online is faster and cleaner than passing paper around.

The practical advantage shows up with multiple members. A multi-member LLC means several signers, and emailing a PDF from person to person creates version confusion and missing signatures. Sending one envelope to all members with a defined signing order means everyone signs the same final document, and you get one executed copy for your records. When you later amend the agreement, the amendment has to be signed by the members too, so a repeatable e-signing workflow saves time every time the deal changes. You can run the whole process, initial signing and later amendments, through an LLC operating agreement electronic signature flow built for multi-party documents.

How do you amend an LLC operating agreement?

Amend it by following the amendment procedure written into the agreement itself, which usually requires a specific member vote, then documenting the change in writing and having the members sign it. Keep the signed amendment with the original agreement. The change is not effective until the required members approve and sign it.

Common reasons to amend include adding or removing a member, changing ownership percentages after a new capital contribution, switching between member-managed and manager-managed, or updating profit splits. Write the amendment as a short document that references the section being changed, states the new language, and is dated and signed by the members whose approval the agreement requires. Do not just edit the original file and reprint it. A clean, separately signed amendment leaves a clear record of what changed and when. Store every version together so the current terms are never in doubt.

An operating agreement is a living document. Draft it carefully at the start, sign it properly, keep it with your records, and update it in writing whenever the ownership or management of the business changes. This is general information, not legal advice, so have a business attorney review the agreement before the members sign.

LLC Operating Agreement: What It Is, Who Signs It, and What It Should Include