Operating
Agreements
Your LLC's most important document. We draft customized operating agreements that protect your investment, clarify member relationships, and plan for the unexpected.
📋 Key Takeaways
- Oklahoma doesn't require an operating agreement, but banks do for business accounts
- Without an operating agreement, Oklahoma's default LLC statutes govern (18 O.S. § 2004)
- An operating agreement protects your liability shield when challenged
- Single-member LLCs need operating agreements too—for banks, liability protection, and succession
- Template agreements miss critical provisions specific to your business
- Amendment procedures should be spelled out in the original agreement
What Is an Operating Agreement?
An operating agreement is the governing document for your LLC under the Oklahoma Limited Liability Company Act (18 O.S. § 2000 et seq.). It defines how the business operates, how decisions are made, how profits are shared, and what happens when things change. Think of it as the constitution for your company.
While Oklahoma doesn't legally require an operating agreement, operating without one is like running a business on a handshake—fine until there's a disagreement.
Why Every LLC Needs an Operating Agreement
Protects Your Liability Shield
An operating agreement demonstrates that your LLC is a separate legal entity from you personally. If someone ever challenges your liability protection (trying to "pierce the corporate veil"), having a proper operating agreement is key evidence that you've maintained proper separation.
Overrides Default Rules
Without an operating agreement, Oklahoma's default LLC statutes govern your company. These defaults may not match what you intended—for example, default rules typically allocate profits equally among members regardless of capital contributions.
Opens Business Accounts
Most banks require an operating agreement to open a business account. If you don't have one, you'll need to create one anyway.
Prevents Disputes
Most business disputes among owners arise from unclear expectations. A well-drafted operating agreement addresses potential conflicts before they happen.
Key Provisions
Ownership and Capital
- Membership interests and percentages
- Initial capital contributions
- Procedures for additional capital calls
- Treatment of member loans
Profit and Loss Allocation
- How profits and losses are divided
- Distribution timing and priorities
- Tax allocation provisions
Management Structure
- Member-managed vs. manager-managed
- Voting requirements for different decisions
- Day-to-day operational authority
- Major decisions requiring member approval
Transfer Restrictions
- Right of first refusal
- Approval requirements for new members
- Valuation methods
- Payment terms for buyouts
Exit Provisions
- Voluntary withdrawal
- Death or disability
- Divorce of a member
- Forced buyouts (member disputes)
Dissolution
- Events triggering dissolution
- Procedures for winding up
- Distribution of remaining assets
Single-Member LLC Agreements
Even if you're the only member, you need an operating agreement to:
- Document your operating procedures
- Establish your LLC as a separate entity
- Open bank accounts
- Plan for succession or sale
- Protect your liability shield
Common Operating Agreement Mistakes
These errors create problems when disputes arise:
- Using online templates: Generic agreements miss Oklahoma-specific requirements and your unique business needs
- Unclear buyout provisions: Without valuation methods and payment terms, member exits become lawsuits
- Ignoring death/divorce: What happens to a member's interest in these events? Plan now, not in crisis
- Equal voting for unequal ownership: Consider whether voting should match capital contributions
- No amendment process: Without clear procedures, changing the agreement later becomes contentious
Frequently Asked Questions
Common questions about operating agreements
Is an operating agreement legally required in Oklahoma? +
No, but it's strongly recommended. Without one, Oklahoma's default rules govern your LLC. Banks typically require one to open accounts.
Can I use a template operating agreement? +
Templates often miss important issues specific to your business. A customized agreement is worth the investment—it's what you'll rely on when problems arise.
What should a multi-member agreement include? +
Capital contributions, profit allocation, voting rights, management structure, transfer restrictions, buyout provisions, death/disability provisions, and dispute resolution.
Can an operating agreement be changed? +
Yes, through the amendment process specified in the agreement. Typically requires approval by a specified percentage of members and should be documented in writing.
Do single-member LLCs need an operating agreement? +
Yes. It documents procedures, establishes your LLC as separate, is required by banks, and protects your liability shield.
What's the difference between member-managed and manager-managed? +
Member-managed: all members participate in operations. Manager-managed: designated managers handle operations while other members remain passive.
What happens if a member wants to leave? +
Your agreement should specify buyout procedures, valuation methods, and payment terms. Without these, departures become contentious.
How often should we review our agreement? +
Annually and whenever significant changes occur: new members, ownership changes, or changes in members' personal situations.
Protect Your LLC
Schedule a consultation to discuss your operating agreement needs.