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Georgia Single-Member Operating Arrangement

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Single-Member Operating Arrangement of Limited Liability Company - State of Georgia

THIS OPERATING ARRANGEMENT is hereby established, this the day of , 20, by the Initial Member.

ARTICLE I

FORMATION OF LIMITED LIABILITY COMPANY

1. Formation of LLC. The Initial Member has formed a limited liability company in the State of Georgia named ("LLC"). The operation of the LLC shall be governed by the terms of this Arrangement and the applicable laws of the State of Georgia relating to the formation, operation and taxation of a LLC.

2. Certificate of Formation. The Initial Member has caused to be filed a Certificate of Formation, (“Certificate”) of record with the state, thereby creating the LLC.

3. Business. The business of the LLC shall be:

a)

and

b) To conduct or promote any lawful businesses or purposes that a limited liability company is legally allowed to conduct or promote, within this state or any other jurisdiction.

4. Registered Office and Registered Agent. The registered office and place of business of the LLC shall be and the registered agent at such office shall be . The registered office and/or registered agent may be changed from time to time.

5. Duration. The LLC will commence business as of the date of filing its Certificate and will continue in perpetuity.

6. Fiscal Year. The LLC's fiscal and tax year shall end December 31.

ARTICLE II

MEMBERS

7. Initial Member. The Initial Member of the LLC is .

8. Additional Members. The first new Member, or new Members if several are to be added simultaneously, may be admitted only upon the approval of the Initial Member.

ARTICLE III

MANAGEMENT

9. Management. The Initial Member shall manage the LLC, and shall have authority to take all necessary and proper actions to conduct the business of the LLC. Anyone authorized by the Initial Member may take any authorized action on behalf of the LLC.

ARTICLE IV

CONTRIBUTIONS, PROFITS, LOSSES, AND DISTRIBUTIONS

10. Interest of Members. Each Member shall own a percentage interest in the LLC. The Member’s percentage interest shall be based on the amount of cash or other property that the Member has contributed to the LLC.

11. Initial Contribution. The initial contribution of the Initial Member is $, representing a 100% interest in the LLC.

12. Additional Contributions. In the event additional Members are added, the Members may be called upon to make additional cash contributions as may be necessary to carry on the LLC's business.

13. Record of Contributions/Percentage Interests. A record shall be kept of all contributions to, and percentage interests in, the LLC.

14. Profits and Losses. The profits and losses and all other tax attributes of the LLC shall be allocated to the Initial Member until such time as additional Members are added.

15. Distributions. Any distributions of cash or other assets of the LLC shall be made as determined by the Initial Member or, if additional Members are added, by a majority of the Members.

16. Change in Interests. In the event additional Members are added, and if during any year there is a change in a Member's percentage interest, the Member's share of profits and losses and distributions in that year shall be determined under a method which takes into account the varying interests during the year.

ARTICLE V

VOTING; CONSENT TO ACTION

17. Voting by Members. Until such time as additional Members are added, all decisions will be made by the Initial Member.

18. Majority Defined. As used throughout this agreement the term “majority” of the Members shall mean a majority of the ownership interest of the LLC as determined by the records of the LLC on the date of the action.

19. Majority Required. Any action that requires the vote or consent of the Members may be taken upon a majority vote of the Members, based on the Members' percentage interests unless unanimous consent is required by this Arrangement.

20. Meetings - Written Consent. Action of the Members or Officers may be accomplished with or without a meeting.

21. Meetings. Meetings of the Members shall be held as determined by the Members or as may be called by a majority of the Members.

ARTICLE VI

DISSOCIATION OF MEMBERS

22. Termination of Membership. A Member’s interest in the LLC shall cease upon the occurrence of one or more of the following events:

(a) A Member withdraws by giving the LLC thirty (30) days written in advance of the withdrawal date.

(b) A Member assigns all of his/her interest to a qualified third party.

(c) A Member dies.

(d) A court adjudicates the Member incompetent to manage his/her person or estate.

(e) Distribution by the fiduciary of the estate's entire interest in the LLC.

(f) Distribution upon dissolution of the entity’s entire interest in the LLC.

(g) Member bankruptcy, insolvency, assignment for benefit of creditors, or similar proceeding.

(h) Reorganization or similar action not dismissed or consented to by a majority of the Members.

(i) Appointment of trustee, receiver, or liquidator not vacated within the required time.

(j) Any event provided in applicable state or federal law not inconsistent with the above.

23. Effect of Dissociation. Any dissociated Member shall not be entitled to receive the fair value of his LLC interest solely by virtue of his dissociation.

ARTICLE VII

RESTRICTIONS ON TRANSFERABILITY OF LLC INTEREST; SET PRICE FOR LLC INTEREST

24. LLC Interest. The LLC interest is personal property. A Member has no interest in property owned by the LLC.

25. Encumbrance. A Member can encumber his LLC interest only with the consent of a majority of the other Members.

26. Sale of Interest. A Member can sell his LLC interest only as follows:

(a) If a Member desires to sell his/her interest, in whole or in part, he/she shall give written notice to the LLC. Purchase price shall be paid in cash unless the total purchase price is in excess of $, in which event the purchase price shall be paid in equal quarterly installments.

(b) To the extent the LLC does not buy the offered interest, the other Members shall have the option to buy the offered interest at the Set Price on a pro rata basis.

(c) To the extent the LLC or the Members do not buy the offered interest, the selling Member can then assign the interest to a non-Member.

(d) A non-Member purchaser of a Member’s interest cannot exercise any rights of a Member unless a majority of the non-selling Members consent to him becoming a Member.

27. Set Price. The Set Price for purposes of this Arrangement shall be the price fixed by consent of a majority of the Members.

ARTICLE VIII

OBLIGATION TO SELL ON A DISSOCIATION EVENT CONCERNING A MEMBER

28. Dissociation. Upon the occurrence of a dissociation event with respect to a Member, the LLC and the remaining Members shall have the option to purchase the dissociated Member's interest at the Set Price.

ARTICLE IX

DISSOLUTION

29. Termination of LLC. The LLC will be dissolved and its affairs must be wound up only upon such a decision by the Initial Member, provided no new Members have been added, or upon the written consent of seventy-five percent (75%) of all Members should additional Members be added.

30. Final Distributions. Upon the winding up of the LLC, the assets must be distributed to creditors, then to Members in satisfaction of liabilities, and then to Members for return of contributions and LLC interests.

ARTICLE X

TAX MATTERS

31. Capital Accounts. Capital accounts shall be maintained consistent with Internal Revenue Code § 704 and the regulations thereunder.

32. Sole Proprietorship/Partnership Election. The Initial Member elects that the LLC be taxed as a sole proprietorship, and that if additional Members are admitted, the LLC be taxed as a partnership.

ARTICLE XI

RECORDS AND INFORMATION

33. Records and Inspection. The LLC shall maintain at its place of business the Certificate of Formation, any amendments thereto, this Arrangement, and all other LLC records required to be kept by applicable law.

34. Obtaining Additional Information. Each Member may obtain from the LLC from time to time upon reasonable demand information regarding the state of the business, financial condition, and tax returns of the LLC.

ARTICLE XII

MISCELLANEOUS PROVISIONS

35. Amendment. Any amendment to this Arrangement may be proposed by a Member and becomes effective when approved in writing by a majority of the Members.

36. Applicable Law. This Arrangement shall be construed in accordance with and governed by the laws of the State of Georgia.

37. Pronouns, Etc. References to a Member or Manager shall be deemed to include masculine, feminine, singular, plural, individuals, partnerships, corporations or other business entities, where applicable.

38. Counterparts. This instrument may be executed in any number of counterparts each of which shall be considered an original.

39. Specific Performance. The non-breaching Members shall be entitled to injunctive relief to prevent breaches of this Arrangement.

40. Further Action. Each Member agrees to perform all further acts and to execute, acknowledge and deliver any documents necessary to carry out the provisions of this Arrangement.

41. Method of Notices. All written notices required or permitted by this Arrangement shall be hand delivered or sent by registered or certified mail.

42. Facsimiles. Any copy, facsimile, telecommunication or other reliable reproduction of a writing, transmission or signature may be used in lieu of the original.

43. Computation of Time. In computing any period of time under this Arrangement, the day of the act, event or default from which the designated period of time begins to run shall not be included.

* * *

WHEREFORE, the Initial Member, being the single Member of this LLC, has executed this Arrangement on the day of , 20.

Signed:

Print Name:

Address:

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What the Georgia Single-Member Operating Arrangement Is

A Georgia Single-Member Operating Arrangement is a written operating agreement used by a single-member limited liability company (SMLLC) to record ownership, management authority, capital contributions, and internal procedures. It is an internal contract among the LLC and its sole member that documents governance choices, distribution rules, and succession planning. Georgia does not require filing an operating agreement with the Secretary of State; instead, the agreement functions as evidence of the LLC’s internal rules and helps preserve limited liability and clarify tax classification with the IRS.

Why a Written Operating Arrangement Matters for a Georgia SMLLC

A clear written operating arrangement establishes member rights, helps protect the corporate veil, clarifies capital accounts and distributions, and documents decision-making authority. For single-member LLCs it creates a formal record to support limited liability and to guide tax reporting and potential future expansions.

Why a Written Operating Arrangement Matters for a Georgia SMLLC

Who Typically Prepares or Signs This Arrangement

Use the agreement at formation, when ownership or capital contributions change, or before lending or sale transactions to provide a clear legal record.

  • Sole Owner — Entrepreneurs who form an SMLLC and need to document governance, capital structure, and tax choices.
  • Small Business Attorney — Drafts or reviews terms to align with Georgia law and limit personal exposure.
  • Accountant or CPA — Ensures tax classification, capital account treatment, and bookkeeping consistency.

Representative Roles and What They Do

Single-Member Owner

The sole member is the party who signs and approves the arrangement, documents capital contributions, and sets management rules; the agreement should state whether the member manages operations directly or appoints managers and include signature/date fields.

Outside Counsel

An attorney reviews legal language, ensures compliance with Georgia statutory defaults, recommends indemnity and limitation clauses, and files or stores the executed agreement as part of corporate records.

Essential Information the Arrangement Should Contain

LLC Name: Full legal entity name
Member Name: Full legal name
Effective Date: MM/DD/YYYY
Capital Contributions: Amount or description
Management: Member-managed or manager-managed
Tax Classification: Default or elected status

Core Sections to Include in a Professional Arrangement

A comprehensive single-member operating arrangement covers governance, finances, transfer restrictions, dispute resolution, tax treatment, and signature provisions to reduce later ambiguity.

Formation

Detail the LLC formation facts, state of formation, principal place of business, and effective date to establish the agreement’s baseline.

Capital & Distributions

Describe member contributions, allocation of profits and losses, distribution priorities, and procedures for additional contributions or loans to the LLC.

Management & Authority

State whether the member or an appointed manager controls daily operations, signing authority thresholds, and approval mechanics for major actions.

Transfer Restrictions

Include buy-sell provisions, restrictions on transfers, rights of first refusal, and procedures for admitting new members or successors.

Tax & Accounting

Specify fiscal year, accounting method, tax election intent (e.g., disregarded entity or corporate election), and who prepares tax filings.

Termination & Succession

Set rules for dissolution events, member death or incapacity, winding up, and asset distribution priorities.

Step-by-Step: How to Complete the Arrangement

Follow these steps in order to create, review, sign, and retain a legally useful operating arrangement for a Georgia SMLLC.

  • 01
    Draft: Populate entity and member details, management structure, and capital terms.
  • 02
    Review: Have counsel and the CPA verify legal and tax language.
  • 03
    Execute: Sign and date the final version; consider notarization for added proof.
  • 04
    Store: Keep an executed copy with corporate records and tax files.

How to Configure an Online Signing Workflow

Set up a standard e-sign workflow that captures signatures, audit data, and stores executed copies securely.

Field Configuration
eSignature Provider Choose provider (e.g., signNow) with audit trail and storage
Authentication Use email link or SMS code; consider KBA for high-risk transactions
Template Reuse Save a template for repeat use and consistent fields
Notifications Enable signer reminders and completed-document alerts

Digital Signing and Submission Considerations

Confirm the platform supports ESIGN/UETA compliance, audit logs, and your organization’s retention policy before e-signing and storing the agreement.

  • File Formats: PDF and DOCX are standard; signed PDFs preserve appearance and audit data
  • Integrations: Look for connectors to Google Workspace, Microsoft 365, NetSuite, or cloud storage
  • Security: Require TLS encryption in transit and AES-256 at rest

Comparison: eSignature Options for Signing and Managing the Arrangement

Basic vendor pricing and key feature availability to consider when selecting an eSignature provider for agreement execution.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day trial Varies by vendor Varies by vendor Varies by vendor Varies by vendor
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No

Common Mistakes to Avoid When Preparing the Arrangement

  • Using vague contribution language that leaves capital accounts undefined and creates future disputes over distributions.
  • Not specifying management authority, which can lead to confusion about signing authority for contracts or bank accounts.
  • Failing to document amendments after a membership change, undermining protections and corporate formalities.
  • Assuming the agreement must be filed with the state and neglecting to retain an executed original in corporate records.

Short Summary of Legal and Financial Risks

Veil Piercing: Increased litigation risk
Tax Misclassification: IRS penalties, backup withholding
Contract Liability: Personal exposure if formalities ignored
Regulatory Noncompliance: Industry fines and sanctions
Recordkeeping Gaps: Evidence problems in audits or disputes
Incorrect Amendments: Disputes over member intent

Where to Keep, File, or Deliver the Executed Agreement

Decide a single authoritative repository for the executed agreement and set a consistent distribution process for stakeholders and advisors.

  • Corporate Records: Store executed originals with the company minute book
  • Tax Files: Provide copies to the CPA for tax reporting and audit support
  • Lenders: Share certified copies when requested for financing or collateral
  • Cloud Backup: Keep encrypted digital copies with restricted access

Key Timing Considerations

There are no state filing deadlines for an operating agreement, but timing matters for related tax or organizational steps.

Adopt at Formation:

Create and sign when forming the LLC to evidence initial governance choices

Amend Promptly:

Update within days of capital or management changes to preserve protections

Tax Elections:

File any IRS elections (e.g., corporate election) by the IRS deadline applicable to that election

Annual Review:

Review the agreement annually with counsel and accountant

Record Retention:

Retain executed copies per retention guidance to support audits and disputes

Tips for Accurate, Efficient Completion

Adopt these practices to reduce errors, preserve liability protections, and simplify future transactions.

Use Clear, Specific Language
Avoid ambiguous phrases; define terms and numeric thresholds for distributions, voting, and approval to minimize interpretation disputes and simplify enforcement.
Keep a Single Source of Truth
Store the executed original and a secure digital copy in one authoritative repository and grant limited access to advisors and signatories.
Document Changes Formally
Amend the agreement in writing, have the member sign and date amendments, and circulate updated copies promptly to all parties and advisors.
Coordinate with Tax and Legal Advisors
Confirm how the agreement affects tax filings and regulatory obligations before finalizing; schedule a review when major financial events occur.

Practical Use Cases for a Single-Member Arrangement

Two common scenarios show how a written arrangement supports operations, lending, and succession planning for small single-member businesses.

Small Rental Business

A landlord documents capital contributions and profit distributions

  • Agreement designates member as manager and sets rent collection procedures
  • This reduces disputes with property managers, supports bank account access, and eases mortgage or insurance underwriting by proving authority and financial structure.

Independent Consultant

A consultant forms an SMLLC and records fee allocation and expense reimbursement

  • The agreement clarifies ownership of client contracts and IP
  • Lenders and partners rely on the document to verify management authority and tax classification when assessing credit or entering joint engagements.

Frequently Asked Questions About Execution and Validity

Answers to common questions about e-signing, notarization, amendments, and tax implications for Georgia single-member operating arrangements.


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