Operating agreements aren’t just for multimember LLCs and large organizations. Even small businesses and single-member LLCs can benefit from having written bylaws. If an LLC does not have a written operating agreement at the time of LLC formation, it’s governed by state default rules. Operating agreements vary in structure and tend to be anywhere from 10–20 pages long.
State laws and operating agreements.
When you create an operating agreement, familiarize yourself with your state’s default operating laws, how your state handles partner disputes, and any other relevant compliance issues you may face. Check with your state’s business division to see if you are meeting all legal requirements. Business divisions are usually, but not always, part of the Secretary of State’s office.
U.S. states generally don’t require you to file an operating agreement with the state, but LLCs do need documentation, either their own agreement or a state’s preexisting framework, that outlines rights and responsibilities. Every business entity, even one as small as a sole proprietorship, needs protections from risks like personal liability and a roadmap for events like buyouts.
If you are uncertain about your legal rights and responsibilities when you create an operating agreement, consult a business attorney who specializes in your local laws.