Your Texas LLC operating agreement is a legal document that establishes rules for how your LLC will handle procedures like voting, allocating profits and losses, management, and even—should it ever come to this—dissolution. You can use one of our attorney-drafted templates to fill out, save, and download your operating agreement for free.
An operating agreement is an internal document, but that doesn’t make it any less important than the documents you file with the state. In fact, adopting a strong operating agreement is essential. That’s why we at Northwest offer a range of free, attorney-drafted operating agreement templates to help suit your business needs.
Technically, your Texas operating agreement can include anything (within the law) not already covered by Texas’s state statutes. However, a strong operating agreement is essential, and should include:
Want to focus on your business and leave the legal hullabaloo to us? Our lawyers drafted a comprehensive operating agreement you can use for free. You can even fill it out on this page, save it in a free account for later, and download a completed draft to sign.
In order to fill out our free operating agreement template, you’ll need your:
This must be your business’ legal entity name, or the name you put on your LLC Articles of Organization.
Did an LLC member contribute $500? $5k? A storefront? Put that here.
You’ll just write in 16 here since our version has a set amount of pages.
Remember, this is an internal document, so you won’t have to submit these names to the state just because they’re on here. However, you might need to add these people to your BOI Report.
Include any initial contributions, even if it’s only a small percentage.
While we recommend having a business bank account, some banks like to actually see the operating agreement before you open the account. If that’s the case, you can leave this blank for now.
This is the place your business operates from.
You can add this in later if you aren’t sure when your meeting will be held.
There’s a few different spots where you’ll need to add at least one members’ signature. These are on pages 13, 14, 15, and 16 on our template.
A Texas LLC should have an operating agreement because a company cannot act for itself. In order to operate, LLCs require real humans (and other entities) to carry out company operations.
According to Texas Business Organizations Code § 101.052, Texas LLCs are not legally obligated to have an operating agreement (or “company agreement”). However, you will need an operating agreement to maintain your LLC. Here’s why:
After you file your Texas Certificate of Formation, you’ll want to open a bank account for your business. Why? Your LLC only has limited liability if it can prove it’s a separate entity from its owners. Mixing personal and business spending erodes this separation, so it’s crucial to open a business bank account and keep your business finances separate. When you head to the bank, you’ll need to bring a copy of your operating agreement.
To benefit from limited liability status, business owners must be able to show that their company is its own legal entity separate from its owners. One way to do this is to open a business bank account and keep spending separate. Another way is to create (and follow) an LLC operating agreement.
It’s probably impossible to completely eliminate disagreements and misunderstandings within company. (We’re all only human, after all.) But having an operating agreement that establishes rules and procedures for your company can help prevent those minor snags from undoing your LLC.
If you don’t have an operating agreement, your LLC will automatically be governed by Texas’s Limited Liability Company Code. The problem is, Texas’s state statutes might not fit with your business. Creating an operating agreement will allow you to run your company in the way you see fit.
We asked our lawyers for an example of how an operating agreement can make or break your LLC. Here’s what they said.*
“Consider the case of Penny v El Patio, LLC, where the LLC’s manager believed that some individual members received misappropriated funds to the detriment of other members of the LLC. Consequently, the manager initiated litigation attempting to recover those misappropriated funds. The offending individuals tried to collaterally attack the manager’s efforts by asserting to the courts that the attorney hired by the manager lacked authority to bring and continue litigation against the offending individuals on behalf of the LLC. Fortunately for the other LLC members, the members had previously adopted and maintained an operating agreement, and the courts gave weight to the operating agreement’s provision authorizing the LLC manager with full control and powers necessary to conduct the business. The courts interpreted this broad grant of authority as including the authority to file suit against persons and entities believed to have misappropriated funds.
“Had the members failed to adopt and maintain an operating agreement, untold amounts of resources would have been expended litigating and resolving this dispute. For these reasons (and more), a reasonably prudent business owner would (and should) adopt and maintain an operating agreement.”
Here are our LLC operating agreement templates. Select the one that best suits your LLC below.