What Is an LLC Operating Agreement — and Do You Actually Need One?
An operating agreement is the contract between an LLC's owners about how the company runs — ownership, decisions, money, and exits. It's internal: never filed with the state, but asked for constantly.
What it actually does
Three jobs: it overrides your state's one-size-fits-all default rules with terms you chose; it documents the separation between owners and company (the evidence courts want when someone attacks your liability shield); and it answers the questions banks, lenders, and buyers ask — who owns this, and who can sign?
Do you need one?
Legally required in California, New York, Missouri, Maine, and Delaware. Practically required everywhere: banks request it at account opening, and a single-member LLC without one looks — to a court — like a sole proprietorship wearing a costume. Multi-member LLCs without one are a handshake deal with statutory defaults nobody read.
What happens without one
State default rules apply: often equal management rights regardless of ownership split, awkward transfer rules, and dissolution triggers you didn't pick. Every dispute becomes a statutory argument instead of a contract lookup. The fix costs minutes: generate the agreement above, sign it, keep it with your records.
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