Do You Need an Operating Agreement for Your LLC?

Why it matters—even if your state doesn’t require it—and what to include in yours.

What is an Operating Agreement?

An Operating Agreement is a document that outlines how your LLC will be run. It’s basically the rulebook for your business.

It covers:
  • Who owns the LLC
  • How profits are handled
  • What happens if you close the business
  • How decisions are made

Even if you’re the only owner, this document helps show the IRS and courts that your business is separate from you personally.

Is it legally required?

Only a few states legally require an Operating Agreement. But here’s the truth:

You still need one—even if your state doesn’t.

Why? Because it protects your limited liability status. Without it, you’re at higher risk of:

  • Legal confusion about how your business is structured
  • Problems opening a business bank account
  • Courts “piercing the corporate veil” and holding you personally liable

An Operating Agreement helps prove you’re operating a real, separate business—not just using a name.

What to include in your Operating Agreement

For single-member LLCs, a solid Operating Agreement should include:

  • LLC name and address
  • Purpose of the business
  • Your name as the sole owner
  • How profits and losses are treated
  • What happens if the business closes
  • How the agreement can be updated

It doesn’t need to be long. It just needs to be clear and consistent with your filings.

Do banks require it?

Yes—most business banks require an Operating Agreement to open an account.
Even if you’re the only member.

They usually ask for:

  • Your EIN
  • Your LLC formation confirmation
  • Your Operating Agreement

Having it ready makes opening a business bank account faster and easier.

Can you write one yourself?

Yes. You don’t need a lawyer to create an Operating Agreement if you’re a single-member LLC.

Just make sure you use a clean, professional template that matches your state requirements and shows that you’re following formal business practices.

Start With Genie gives you a customizable, single-member Operating Agreement included with your setup.

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