GlossaryUS
What is an operating agreement?
LLC operating agreement (in Delaware: limited liability company agreement)
Short answer
An operating agreement is the members’ internal agreement on how the LLC is run and managed. It is not filed with the state; the company keeps it.
Explained
Delaware law calls it a limited liability company agreement and accepts that, whatever its name, it can be written, oral or implied. It can be made before, after or at the time the certificate of formation is filed; the law applies to single-member LLCs too and gives maximum effect to freedom of contract.
According to the Wyoming Secretary of State, the operating agreement governs most aspects of the LLC’s management and activities. The state does not review, approve or register it; preparing it and keeping it current is the members’ responsibility.
Good to know
- In Delaware a member or manager is bound by the agreement even without signing it.
- A single-member LLC can also have an operating agreement.
- The agreement has legal effect; consider asking a lawyer about your specific situation.
Official sources
- Delaware Code — Limited Liability Company Act §18-101
- Delaware Division of Corporations — FAQ
- Wyoming Secretary of State — The Choice Is Yours
Verified on:
This page is general information, not legal or tax advice. Rules change; check the official source for the latest position or talk to us.
All terms
