This agreement can be used for a California limited liability company (LLC) that has only one member and is member-managed.

While California law does not require an LLC to have a written operating agreement, it is prudent to put the company’s management, financial and other arrangements into a written contract which accurately reflects the particular needs of the company. This is because the California Revised Uniform Limited Liability Company Act (Act) provides a set of default rules where the operating agreement is silent but it will give way to any contractual arrangement among members for an LLC's operation.

What does the Operating Agreement cover?

• Organizational matters, including the company’s name, place of business, term, business and purpose, required filings, registered office and registered agent and tax representative.

• Capitalization and financing.

• Allocation of net income and net loss.

• Distributions.

• Company expenses.

• Authority and responsibilities of the member.

• Assignment of the member’s interest.

• Records, audits and reports.

• Dissolution and termination of the company.

Since the company only has one member, clauses relating to voting and transfers are less prominent than operating agreements for limited liability companies with multiple members.

When completing this agreement, you may want to consult with the company’s tax and/or accounting service providers to ensure the tax and accounting provisions are appropriate for the company. However, before making any changes to the clauses, you should consider Cal. Corp. Code § 17701.10(c)-(g) which places restrictions on varying certain provisions in the operating agreement.