Operating Agreement LLC Texas (Sep. 2026) – FREE Templates & Guidance

A Texas Operating Agreement is the document that explains how your LLC works internally.

The state doesn’t require you to file one when forming the LLC. But skipping it can create problems later because your business automatically falls under Texas default LLC rules, whether those rules fit your situation or not.

If you want more control over how decisions are made, how profits are divided, or what happens when members leave the business, you’ll want a solid Operating Agreement in place from the beginning.

I’ll walk through how to create a clear and enforceable Texas LLC Operating Agreement, what sections matter most, and why they’re important. You can get access to my free template that you can use to speed things up and avoid common drafting mistakes.

Texas LLC Operating Agreement Overview

An LLC Operating Agreement, or Company Agreement under Texas law, is a contract between the LLC members. It explains how the company operates day-to-day. It outlines voting rights, profit and loss distribution, management authority, and ownership transfers. Additionally, it defines procedures for dissolution if the business closes.

Texas doesn’t legally require LLCs to have an Operating Agreement under Texas Business Organizations Code (BOC) §101.052.

That being said, I strongly recommend having one, even for a single-member LLC, for the following reasons:

• Override certain default Texas LLC rules
• Help strengthen personal liability protection
• Clarify responsibilities and reduce disputes
• Control how profits get distributed
• Help with ownership changes later on
• Make opening a business bank account much easier

If you want the agreement to actually work, it needs to match how your LLC is managed. There are two common structures:

• A member-managed LLC means all members are active participants. They sign the contracts, make the decisions & run the business day to day. This is often the case in smaller businesses where the owner wants to keep control.
• In a manager-managed LLC, the members give management authority to one or more managers. Those managers might be LLC members, but they can also be outside professionals hired to run the business. The remaining members usually take a more passive role and stay focused on ownership rather than daily management.

Not sure which structure makes more sense for your business? I’ve also written a comparison guide covering Member-managed vs. Manager-managed LLCs.

You can draft your own Operating Agreement using my template below and customize it to fit your company. But if you have more complex terms, I think it’s better to have a business attorney to write the Operating Agreement for you. That helps make sure everything is properly written and enforceable.

1. Do You Submit Your Operating Agreement To The State?

No, you don’t need to file your Operating Agreement with the Secretary of State or any other government office.

The Operating Agreement is considered an “internal” company document in Texas. LLC members simply keep signed copies for their records.

The agreement is still legally binding once the members sign it. No state approval required.

That said, you’ll probably need to show it at some point. Banks often ask for it when opening a business account, lenders may request it during financing, and courts can require it if the LLC becomes involved in a legal dispute.

2. When Should You Write An Operating Agreement?

You can technically create your Operating Agreement before, during, or after forming the LLC. Here’s a simpler breakdown:

I recommend agreeing on the major terms first, things like ownership percentages, management structure, voting rights, profit distribution, and exit rules. Once everyone is on the same page, you can file the Certificate of Formation to officially create the LLC.

After the LLC is formed, you can make adjustments to the Operating Agreement and have all members sign it so the document becomes enforceable.

This way keeps the formation process moving without leaving important business rules undefined.

What To Include In Your Texas LLC Operating Agreement

1. LLC Formation Details

Start with the foundational information about your LLC, including:

• LLC name
• Principal business address
• Business purpose
• Texas Registered Agent information
• LLC management structure

This section should match the information filed in your Certificate of Formation exactly.

2. Members & Ownership Percentages

Here you’ll list the members of the LLC and their ownership percentage.

That ownership number is crucial because it typically impacts just about everything else in the agreement, like voting power, profit distributions, decision-making authority, and buyout rights.

3. Initial Capital Contribution

This section describes how much each member brought to the table to help start the business. It doesn’t have to be money only. All equipment, property or anything of value must be documented. And the number recorded here is the ground to calculate the ownership percentages that I just discussed above.

And once money is contributed, it should be put into the business bank account of the LLC. This makes it clearer and easier to follow later on.

If the agreement is being drafted before the LLC is formed, first agree on contribution amounts. Lock it in now, and if something changes, you can tweak the details later.

4. Distribution Of Profit & Loss

Your Operating Agreement should explain exactly how profits and losses are divided among the members.

You can simply tie distributions to ownership percentages. Someone with 50% ownership gets 50% of the profits. Simple.

Or members can agree to different allocation arrangements if they want. The important thing is making the terms very clear so nobody’s surprised later when distributions happen.

5. Voting Rights And Decision-Making Process

Use this section to clearly explain how votes will be allocated to members and how major business decisions will be made.

In a member-managed LLC, voting power is generally proportional to ownership. The more of the company you own, the more say you have in the decisions. The person who has the higher percentage gets more weight in the voting.

A manager-managed LLC operates differently. The manager makes most of the decisions without a vote from the members. That’s the whole point of having a managing member in the first place.”

But there should also be clear limits on what a manager can’t do. Big decisions, such as closing the LLC or changing members, still require meetings and votes of other LLC members.

6. Membership Changes

Your Operating Agreement should also contain clear procedures for the transfer of ownership interests and the admission of new members.

Even if you’re operating a single-member LLC, it’s worth adding this. Things change, so if you get it in writing now, it saves you scrambling later if you decide to bring someone in.

7. LLC Dissolution

This section explains what events can trigger dissolution and who gets authority to approve shutting the company down.

Then comes the winding-up process. The LLC may need to sell assets, pay off debts, close accounts, settle taxes, and handle any remaining obligations before officially closing.

After everything is wrapped up, any remaining funds or property get distributed among the members based on the agreement terms.

If you don’t plan this out beforehand, things can get ugly when the time comes.

8. Amend Operating Agreement

Business is never static. Ownership changes; Roles shift. Profit arrangements are changed. New investors arrive. Old members come and go.

So your Operating Agreement needs to outline how changes can be approved.

Make a clear rule for this. Does every member have to approve updates or is it a majority (based on ownership percentages)?

Frequently Asked Questions