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Texas does not legally require an LLC to have an operating agreement. The Texas Business Organizations Code (BOC) lets LLCs operate without one — but if you don't have one, state default rules fill the gap, and those defaults often produce outcomes members never intended. For most Texas LLCs, skipping a written operating agreement is a mistake that costs far more to fix later than to prevent now.

Disclaimer: This page is informational only and does not constitute legal or tax advice. Rules can change; verify requirements at official sources or consult a licensed Texas attorney before making decisions about your LLC.

Step 1: Know What Texas Law Actually Says

Texas calls the governing document of an LLC a "company agreement" rather than an operating agreement — but they mean the same thing. Under Texas Business Organizations Code Chapter 101, a company agreement can be:

  • Written (strongly recommended)
  • Oral
  • Implied by the conduct of the members

Critically, no written agreement is required to form or maintain a Texas LLC. You will not find a checkbox on the Certificate of Formation (Form 205) asking for an operating agreement. The Secretary of State does not require you to file one, and the Comptroller does not ask for it when you file your annual franchise tax report.

This is different from states like California, which have more prescriptive requirements. Texas gives LLCs broad flexibility to structure themselves however they choose — within the bounds of the BOC.

Common mistake: Confusing "not required by the state" with "not needed." These are not the same thing. Just because Texas won't penalize you for skipping an operating agreement doesn't mean your LLC is protected without one.

Step 2: Understand What Happens Without an Operating Agreement

When a Texas LLC has no written company agreement, the BOC's default rules automatically apply. Here's what those defaults mean in practice:

Ownership and voting:

  • Members vote in proportion to their ownership percentage — so far, so good
  • But many other decisions default to unanimous member consent, which can deadlock a multi-member LLC over routine matters

Profit and loss distributions:

  • Profits and losses are allocated in proportion to the members' contribution to capital — but "contribution" can be disputed without a written record of what each member put in

Management:

  • By default, all members of a Texas LLC have the right to bind the company (member-managed structure)
  • There is no default mechanism to appoint a single managing member unless agreed upon
  • Without clear authority rules, a single disgruntled member can create legal exposure for the entire LLC

Succession and buyout:

  • If a member dies, becomes incapacitated, or wants to exit, Texas defaults do not guarantee a smooth buyout
  • The BOC's default transfer rules restrict the transfer of membership interests — meaning a member's heirs may receive financial interest but not management rights, creating an awkward co-ownership situation

What banks and lenders see: Many Texas banks and the SBA require a written operating agreement before opening a business checking account or approving a small business loan. Even if Texas law doesn't require one, your bank probably does.

Step 3: Decide Whether Your LLC Needs an Operating Agreement

Use this quick guide to determine urgency:

Single-member LLCs: You have no other members to disagree with, but an operating agreement still matters for two reasons. First, it reinforces the separation between you and the LLC — a documented structure helps defend your liability shield if ever challenged in court. Second, banks and lenders routinely require it.

Multi-member LLCs: A written operating agreement is essentially mandatory in practice. Without one, profit splits, decision-making authority, and exit procedures are governed by defaults that almost certainly don't reflect what you and your partners intended. A single undocumented dispute can escalate into litigation that costs tens of thousands of dollars.

LLCs with outside investment: If you have or expect investors, lenders, or partners, they will require a written operating agreement before putting money in. Period.

LLCs that own real estate: Many Texas county clerks and title companies require an operating agreement to confirm who is authorized to sign on behalf of the LLC when buying or selling property.

The short answer: virtually every Texas LLC should have a written operating agreement, even though the law doesn't force you to create one.

Step 4: Create Your Operating Agreement

A Texas LLC operating agreement does not have a state-mandated form. You draft it privately, sign it (all members should sign), and keep it in your business records. You do not file it with the Secretary of State or the Comptroller.

What to include in a Texas LLC operating agreement:

  1. LLC name, formation date, and registered agent — match these exactly to your Certificate of Formation
  2. Member names, addresses, and ownership percentages — list every member and their exact percentage interest
  3. Capital contributions — document what each member put in (cash, property, services)
  4. Profit and loss allocation — specify how distributions are divided, and when they can be made
  5. Management structure — member-managed (all members run the business) or manager-managed (appointed manager runs day-to-day operations)
  6. Voting rights and thresholds — which decisions require unanimous consent vs. majority vote vs. a single manager's approval
  7. Member exit and buyout procedures — what happens when a member wants to leave, gets divorced, dies, or goes bankrupt
  8. Admission of new members — what vote is required to bring in a new member
  9. Dissolution procedures — how the LLC is wound up if members choose to dissolve it

How to create one:

  • DIY with a template: Many legal document services offer Texas-specific LLC operating agreement templates for $0–$50. They work fine for straightforward single-member LLCs.
  • Online legal service: Services like Clerky, Stripe Atlas, or similar provide customizable agreements for a flat fee.
  • Attorney-drafted: For multi-member LLCs, LLCs with complex structures, or LLCs with significant assets, a Texas business attorney can draft a custom agreement. Expect to pay $500–$2,000+ depending on complexity.

After signing: Store the signed agreement with your other LLC formation documents. Give a copy to every member. Revisit it any time a member joins or leaves, ownership percentages change, or you make major changes to how the business operates.

This process typically takes a few hours to a few days, depending on how you create it and how long it takes members to align on terms.

Quick reference

DetailInfo
WhatTexas LLC Company Agreement (Operating Agreement)
Required by Texas law?No — optional under the Texas Business Organizations Code
Where to fileNowhere — kept privately by the LLC
FormNo standard form; privately drafted
Cost$0 (DIY) to $2,000+ (attorney-drafted)
When to createBefore transacting business or opening a bank account
Risk without oneBOC default rules apply; liability protection may be harder to defend
Governing lawTexas Business Organizations Code, Chapter 101

Frequently Asked Questions

Is an operating agreement required for a Texas LLC?

No. Texas law does not require a Texas LLC to have a written operating agreement (called a "company agreement" under the Texas Business Organizations Code). However, most banks, lenders, and business partners will require one before working with your LLC, and it is strongly recommended for any LLC with more than one member.

What happens if a Texas LLC has no operating agreement?

The default rules in the Texas Business Organizations Code (Chapter 101) govern the LLC automatically. This means state-set defaults control profit distributions, voting rights, management authority, and member exit procedures — which often don't reflect what the members actually intended. Disputes are much harder and more expensive to resolve without a written agreement.

Can a single-member LLC in Texas skip an operating agreement?

Technically yes, but it's still a bad idea. A written operating agreement helps demonstrate that the LLC is a separate legal entity from its owner, which is important if your liability protection is ever challenged in court. Most banks and the SBA also require it before opening an account or approving a loan.

Does Texas require an operating agreement to be filed with the state?

No. Texas does not require you to file your operating agreement with the Secretary of State, the Comptroller, or any other state agency. It is a private document kept by the members of the LLC.

What should a Texas LLC operating agreement include?

At minimum: member names and ownership percentages, capital contributions, how profits and losses are allocated, management structure (member-managed vs. manager-managed), voting thresholds for major decisions, and procedures for a member leaving or the LLC dissolving. Multi-member LLCs should also address buyout rights and how new members can be admitted.

Not sure what else your Texas LLC owes?

Most business owners are surprised by how many filing obligations they have. Ortholo's free compliance checker shows you everything you owe, when it's due, and what happens if you miss it — personalized to your entity.

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Last verified: 2026-05-20

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