9 Things Every LLC Operating Agreement Should Include (From a Lawyer)

Creating your LLC is a great start, but if you skip the operating agreement, you’re leaving some of the most important business decisions up to your state’s default rules.

As a lawyer for content creators and online entrepreneurs, I designed my LLC Operating Agreement templates to include the real-world clauses that small businesses actually need, not just generic legal filler.

Here are 9 things every LLC operating agreement should include:

Legal Disclaimer: This post is for educational purposes only and does not constitute legal advice. Read full disclaimers.

1. Member Details and Ownership

Your agreement should clearly name each member (or just you, if you’re a single-member LLC) and define ownership. That might be 100% to you, or split by percentage in a multi-member business. This isn’t just paperwork; it’s what proves who owns what.

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2. Capital Contributions

What did each member put into the business?
Cash, intellectual property, equipment, or even services? This section documents those contributions and lays the groundwork for profit-sharing and ownership stakes. Even if you’re the only one contributing, this still matters for tax, banking, and legal reasons.

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3. Profit Distributions and Tax Status

How will profits be distributed? On what schedule? Will you be taxed as a sole proprietor, partnership, or S Corp? This clause lays out when and how members get paid, and how the business is taxed. My templates include built-in options and guidance so you can choose what fits.

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4. Management and Decision-Making

Who runs the day-to-day? Is your LLC member-managed or manager-managed? What kinds of decisions need a vote? How are votes counted? This section spells out how your business operates in practical terms. It’s also where you establish things like quorum, majority rules, and who signs off on big decisions.

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5. Adding or Removing Members

Even if you’re solo right now, you may want to bring on a partner, investor, or co-founder later. And if you have partners, things change. People exit, sell, or stop contributing. This section lays out the process and protects everyone’s rights and responsibilities.

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6. What Happens if You Dissolve

If you ever decide to close the business, your agreement should explain how that works, including how debts are paid and how any leftover assets are divided. My templates include straightforward dissolution language, so you’re not stuck guessing (or Googling) if that day ever comes.

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7. Dispute Resolution Clause

Every operating agreement should include a section on how disputes will be resolved, and whether they’ll go through court or private arbitration. You might not need it now, but if a conflict ever arises, this clause will dictate how it’s handled. It’s the kind of thing you hope you never use, but are really glad to have if things get messy.

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8. Statement of Authority

This section spells out who has the legal authority to act on behalf of the LLC, whether it’s signing contracts, opening a bank account, or making official decisions. It’s especially important if you’re the only member but still want to show clear lines of authority when dealing with banks, platforms, or clients.

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9. Indemnification and Limitation of Liability

This is where your operating agreement protects members (and managers, if applicable) from being personally responsible for actions taken on behalf of the LLC, as long as those actions are lawful and in good faith. It helps reinforce your liability shield and gives everyone involved added peace of mind.

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Final Thoughts: Don’t Leave This to Guesswork

Your LLC operating agreement isn’t just a formality, it’s the foundation of how your business runs and how your rights are protected.

Whether you’re flying solo or sharing ownership with a team, taking the time to include these 9 essential elements can save you a world of stress, confusion, and legal exposure down the line.