Single-member LLC operating agreement document pack

An operating agreement is the wall that separates 'an LLC that protects you' from 'a name on a state filing that doesn't.' Banks, courts, and the IRS all want to see one — even when only one person owns the company.

Who this pack is for

You're the sole owner of an LLC — software side project, consultancy, retail shop, freelance practice — and you've already filed Articles of Organization with your state. Now you need the internal rulebook that says how the LLC works, who the member is, how money moves between you and the company, and what happens if you get hit by a bus. Banks ask for it before opening a business account. The IRS expects it as evidence the LLC is a real entity. And if anyone ever sues you, your operating agreement is one of the documents a court will look at to decide whether to respect the corporate veil or pierce it.

When to use it

Sign the operating agreement immediately after the state approves your Articles of Organization, and before you open a business bank account. The OA's effective date should match or follow your formation date — never precede it. If you've been operating without one for months or years, sign one now (back-dating is fine if you note it as 'reflecting the actual practice since [original formation date]'). The OA is also the natural place to record any change in ownership, capital contribution, or business purpose; update it any time the underlying facts change. Most states do not require you to file the OA with anyone — keep it in your records and produce it when asked.

What it doesn't cover

This pack is a single-member operating agreement and assumes the LLC is taxed as a disregarded entity (federal default for single-member LLCs). It does not handle multi-member structures, S-corp or C-corp tax elections (those require Form 2553 or 8832 and additional considerations the OA should reflect), or LLCs with significant outside investors. It does not draft bylaws (LLCs don't have bylaws — that's a corporation thing) or shareholder agreements. It does not file your Articles or get you an EIN — Pike has separate packs for the EIN, and Articles are state-specific filings done through your Secretary of State's website. Series LLCs, professional LLCs (PLLCs for licensed professionals), and benefit LLCs all have additional state-specific provisions that the basic single-member OA does not include.

State-specific notes

Rules vary by jurisdiction. Below are notes for the states where single-member llc operating agreement runs into the most variance. If your state isn't listed, default to your state's tenant-rights handbook or local legal aid.

Delaware (DE)

Delaware doesn't require an operating agreement to be in writing (6 Del. C. § 18-101) but the practical reality is no bank, investor, or court will accept an LLC as legitimate without a written one. Delaware's LLC Act gives broad freedom to contract, so the OA can override most default rules — but it has to be in writing to do so.

6 Del. C. § 18-101 →

California (CA)

California requires LLCs to have an operating agreement (Cal. Corp. Code § 17701.10), and it can be oral, written, or implied — but the safe form is written. California also imposes an annual $800 minimum franchise tax on LLCs regardless of profit; budget for that. The OA should reference compliance with California's Statement of Information filing requirement (every two years, plus initial within 90 days).

Cal. Corp. Code § 17701.10 →

New York (NY)

New York is the rare state that requires the OA to be in writing and adopted within 90 days of formation (NY LLC Law § 417). It also requires LLCs to publish a notice of formation in two newspapers in the county where the LLC is located, for six consecutive weeks — a quirky and expensive ($500–$2,000) leftover from the 1990s that catches first-time New York LLC owners off guard. Plan for it.

NY LLC Law § 417 →

Texas (TX)

Texas calls it a 'company agreement' rather than 'operating agreement' (Tex. Bus. Orgs. Code § 101.001(1)), but the substance is identical. Texas has no state income tax but does charge a franchise tax (Texas Margin Tax) on entities with over $1.23M in revenue, with a 'no tax due' threshold below that.

Tex. Bus. Orgs. Code § 101.001 →

Wyoming (WY)

Wyoming is popular for non-resident LLCs because of low fees ($60 annual report) and strong charging-order protection — the primary creditor remedy against a member's interest is limited to a charging order, not seizure of the LLC's assets. The OA should reference Wyoming's charging-order statute (Wyo. Stat. § 17-29-503) to maximize that protection.

Wyo. Stat. § 17-29-503 →

Common questions

Does my single-member LLC actually need an operating agreement?

Practically yes, even if your state doesn't require one. Banks ask for it before opening a business account. The IRS expects it as evidence of formality. Courts look at it when deciding veil-piercing claims. And if you ever bring on a partner, sell the company, or pass it to your heirs, the OA is the document that controls the transition. Without one, default state rules apply — and those defaults are written for the average case, not yours.

How is a single-member LLC taxed?

By federal default, it's a 'disregarded entity' — meaning the IRS ignores the LLC for income tax purposes and you report the business's income and expenses on Schedule C of your personal 1040 (or Schedule E for rental real estate). You can elect to be taxed as a corporation (Form 8832) or as an S corporation (Form 2553) instead — each has tradeoffs. S-corp election is most common when the LLC nets more than ~$80–100k/year and you can pay yourself a 'reasonable salary' to reduce self-employment tax. Talk to a CPA before electing.

Does this protect me personally from business debts?

If you respect the corporate form, yes. 'Respecting the form' means: (1) keep separate business and personal bank accounts and credit cards, (2) don't pay personal expenses out of the LLC, (3) sign contracts as a Member of the LLC, not as yourself personally, (4) maintain the OA and any required state filings. Failing to do these is what 'piercing the veil' means — courts find that the LLC is a sham and let creditors reach personal assets. The OA is the foundation; the practice is the wall.

What's the difference between a Member and a Manager?

A Member is an owner — like a shareholder of a corporation. A Manager is whoever runs the day-to-day operations — like an officer. In a 'member-managed' LLC (the default and what this pack assumes), the Member is also the Manager. In a 'manager-managed' LLC, you can hire a non-owner Manager or designate one of multiple Members as the sole Manager. Single-member LLCs are almost always member-managed; the other form makes more sense when investors want to own without operating.

Do I need an EIN?

If you have any employees, yes. If you elect S-corp or C-corp tax treatment, yes. If you want to open a business bank account or apply for business credit, almost every bank requires one. Even a sole proprietor LLC that uses your SSN can usually get an EIN for free in 15 minutes on the IRS website (or via Pike's SS-4 pack). The EIN gives you a clean separation between the business's tax identity and your personal SSN.

What happens if I die?

By default, your LLC interest passes through your estate. If you have a will, it goes to whoever you've named; if you don't, intestacy decides. The OA can provide for what happens — for example, automatic dissolution, transfer to specific heirs, or buyout of the interest by a designated person. The pack's default OA dissolves on the Member's death unless heirs continue, which is the typical structure for a small LLC. Talk to an estate attorney if the LLC has significant value.

How do I add a partner later?

Amend the OA to admit the new Member, restate the structure as multi-member, set capital contributions and distribution percentages, and (often) elect partnership taxation by default since multi-member LLCs are partnerships for federal tax purposes unless you elect otherwise. This is a significant amendment — Pike's multi-member OA pack is the right starting point, and a tax-aware attorney is worth the call before signing.

Pike provides plain-language legal information, not legal advice. State and local rules change. If money, custody, or your housing is on the line, talk to a licensed attorney or your local legal aid office.