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Nothing in the California LLC filing process asks for your operating agreement. The state's own FAQ on forming an LLC says, in the note on Articles of Organization (Form LLC-1), that operating agreements and meeting minutes are not filed with the Secretary of State. The LLC keeps the agreement. The rest of this page covers what the law says about it, so you know what to put in. For the formation steps, read our California LLC guide.
Does the law say it has to be written?
We read the definition in Corporations Code section 17701.02. It describes the operating agreement as the agreement of all the members, "whether or not referred to as an operating agreement and whether oral, in a record, implied, or in any combination thereof". Nothing in that definition says it must be in writing.
That is not a reason to skip the paper. If members disagree about what was promised, an unwritten deal is hard to prove. For a company with one owner, the code adds that an agreement with only one party is not unenforceable for that reason.
What does the agreement control?
Section 17701.10 says the agreement governs four areas:
- Relations among the members, and between the members and the LLC.
- The rights and duties of a person acting as manager.
- The activities of the LLC and how they are carried out.
- The means and conditions for amending the agreement.
Where the agreement says nothing, the Act fills the gap. That is the default rule, and it is why a short generic agreement is better than none, as long as you read it.
What can it not change?
The same section lists limits. The one most useful to a small owner: an operating agreement cannot vary the rules on the office and the agent for service of process in sections 17701.13 to 17701.16. Whatever the agreement says, you still name a California resident or a qualifying 1505 corporation as agent. See the California registered agent page.
The section also bars the agreement from eliminating the duty of loyalty or the duty of care outright, with limited exceptions it describes. Read the section with a lawyer before you try to narrow those duties.
What should a California agreement include?
Draw items from what your LLC actually does under state rules:
- The name and ending. It matches the Form LLC-1 you filed.
- The agent and office. Record who the agent is and who updates the Statement of Information.
- Management. Say whether the members or managers run the company, and who can sign.
- Money and tax. California charges an annual LLC tax of $800 to the Franchise Tax Board. Decide who pays it and from which account.
- Reports. The Statement of Information is due every two years, in the month of registration.
- Amendments. The code lets the agreement say how it can be changed.
- Exit. What happens when a member leaves, dies or sells.
One owner or several?
A single owner can use a short agreement. See our guide to the single member LLC operating agreement. With two or more members, the details matter more. Read the multi member operating agreement guide.
Why keep it even though the state never sees it?
Banks, lenders and buyers ask for it, and the agreement is what members point to when a dispute starts. Because the state keeps no copy, nobody can pull yours from a public record. Store the signed version with your other company records, note each amendment with a date, and give every member a copy. The Secretary of State's FAQ also says requests for copies should go to the business itself, so expect questions to land with you.
Where do you start?
Use the free operating agreement template. It is generic, it is not legal advice, and it does not know California law. Edit it to match the points above. Then get an EIN (how to get an EIN).
Starting from scratch? The start an LLC form begins the filing.