When starting a Limited Liability Company (LLC), one of the essential documents you need is an operating agreement. This document outlines the rules, procedures, and ownership structure of your business. While not required by law, an operating agreement is crucial as it helps prevent misunderstandings and disputes among owners. Here is a sample of an operating agreement for an LLC.

Article I: Formation and Name

This section establishes the formation of the LLC and outlines its name, which should comply with the state`s naming requirements.

Article II: Purpose and Business Activities

In this section, the operating agreement defines the LLC`s primary purpose and specifies the types of business activities it will undertake.

Article III: Capital Contributions

This section outlines the contributions made by each member to the LLC`s capital, including cash, property, and services. It also defines the ownership percentage of each member.

Article IV: Allocations and Distributions

This section sets the rules for allocating profits and losses to members based on their ownership percentage. It also outlines the process for distributing profits and losses to members.

Article V: Management and Voting

This section outlines the management structure of the LLC, including who will manage the company and their roles and responsibilities. It also details the voting rights of members and the process for decision-making.

Article VI: Transfer of Membership Interest

This section outlines the rules for transferring membership interest and addresses any restrictions on the transfer of membership interests, such as pre-emptive rights or consent requirements.

Article VII: Dissolution and Termination

This section outlines the process for dissolution and termination of the LLC, including the distribution of assets among members.

Article VIII: Miscellaneous Provisions

This section includes any other necessary provisions that are not covered in the previous sections, such as arbitration and dispute resolution, confidentiality agreements, and non-compete clauses.


An operating agreement is an essential document when forming an LLC. It helps establish and maintain clear rules and procedures for your business, reducing the likelihood of misunderstandings and disputes among owners. When creating your operating agreement, it`s important to seek legal advice and tailor the document to meet your specific business needs.