LLC Operating Agreement: Why You Need One (Even Solo)
What an LLC operating agreement is, what it should include, and why even single-member LLCs should have one.
An operating agreement is the internal rulebook for your LLC. Only a handful of states legally require one — but every LLC should have one.
Why it matters
Banks often ask for it before opening a business account. It reinforces your liability protection by proving the LLC is a separate entity. And it prevents disputes between members down the line.
What it should include
Ownership percentages, capital contributions, profit and loss distribution, voting rights, management structure (member-managed vs manager-managed), and what happens if a member dies or leaves.
Single-member operating agreements
Even if you're solo, having one shows the IRS and courts that your LLC is a real, separate entity — which is what protects your personal assets.
Do you need a lawyer?
For simple LLCs, a well-drafted template works. Use a lawyer if you have unusual profit splits, vesting schedules, or outside investors.
It's a one-time document that protects your business for its entire life. Don't skip it.
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