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Single Member Managed LLC Operating Agreement

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SINGLE-MEMBER OPERATING ARRANGEMENT OF LIMITED LIABILITY COMPANY STATE OF IDAHO

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

The Initial Member contemplates that additional Members may join the limited liability company in the future, and the following Operating Arrangement has therefore been developed.

ARTICLE I

FORMATION OF LIMITED LIABILITY COMPANY

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

2. Articles of Organization. The Initial Member has caused to be filed Articles of Organization, (“Articles”) 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 .

5. Duration. The LLC will commence business as of the date of filing its Articles 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.

ARTICLE IV

CONTRIBUTIONS, PROFITS, LOSSES, AND DISTRIBUTIONS

10. Interest of Members. Each Member shall own a percentage interest in 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, upon a majority vote, 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.

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 accordingly.

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.

19. Majority Required. Should additional Members be added, any action that requires the vote or consent of the Members may be taken upon a majority vote of the Members.

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) There is an entry of an order by a court of competent jurisdiction adjudicating the Member incompetent.

(e) In the case of an estate that is a Member, the distribution by the fiduciary of the estate's entire interest in the LLC.

(f) In the case of an entity that is a Member, the distribution upon dissolution of the entity’s entire interest in the LLC.

(g) A Member, without the consent of a majority of the Members, makes an assignment for the benefit of creditors or files bankruptcy.

(h) If within one hundred twenty (120) days after the commencement of any action against a Member seeking reorganization, the action has not been dismissed and/or has not been consented to by a majority of the Members.

(i) If within ninety (90) days after the appointment of a trustee, receiver, or liquidator, said appointment is not vacated.

(j) Any of the events provided in applicable provisions of state or federal law that are not inconsistent with the dissociation events identified 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.

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, he/she shall give written notice to the LLC and must first offer the interest to the LLC.

The LLC shall have the option to buy the offered interest at the then existing Set Price as provided in this Arrangement.

The purchase price shall be paid in cash at closing 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.

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. Except as otherwise provided, 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 the all Members should additional Members be added.

30. Final Distributions. Upon the winding up of the LLC, the assets must be distributed as follows: to creditors; to Members in satisfaction of liabilities; and to Members for return of contributions and respecting their LLC interest.

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 Articles of Organization, any amendments thereto, this Arrangement, and all other LLC records required to be kept by applicable law.

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

ARTICLE XII

MISCELLANEOUS PROVISIONS

35. Amendment. Except as otherwise provided in this Arrangement, any amendment to this Arrangement may be proposed by a Member.

36. Applicable Law. To the extent permitted by law, this Arrangement shall be construed in accordance with and governed by the laws of the State of Idaho.

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. Each Member agrees with the other Members that the other Members would be irreparably damaged if any of the provisions of this Arrangement are not performed in accordance with their specific terms.

40. Further Action. Each Member, upon the request of the LLC, agrees to perform all further acts and to execute, acknowledge and deliver any documents which may be necessary, appropriate, or desirable 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 substituted or 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 Single Member Managed LLC Operating Agreement Is

A Single Member Managed LLC Operating Agreement is a written contract that sets out the structure, governance, financial rights, and responsibilities for a single-owner limited liability company where the owner (the member) appoints a manager to run daily operations. It documents ownership, capital contributions, profit and loss allocation, manager authority, voting procedures, transfer restrictions, dissolution triggers, and amendment processes. While many states do not require filing this agreement with the Secretary of State, maintaining a signed operating agreement is a foundational corporate record that helps preserve liability protection and clarifies internal rules for banks, investors, and courts.

Why this agreement matters for liability and governance

An operating agreement clarifies member and manager roles, preserves limited liability, and records economic terms. Electronic execution is permissible under ESIGN (15 U.S.C. ch. 96) and UETA (1999) when the four-part legal-validity test is met.

Why this agreement matters for liability and governance

Who typically prepares and relies on this agreement

The Single Member Managed LLC Operating Agreement is used by the LLC owner, any appointed manager, and stakeholders who need documented governance and financial terms.

  • Solo owner: Prepares terms, documents capital contributions, and assigns manager authority to limit personal liability.
  • Managers and officers: Use the agreement to confirm scope of day-to-day powers and decision thresholds.
  • Banks and investors: Rely on the agreement to verify authority for account opening, loans, and signing powers.

Keep the agreement with the LLC’s corporate records and provide a copy to banks, lenders, and key service providers to avoid disputes.

Core provisions to include in a professional agreement

A complete Single Member Managed LLC Operating Agreement combines governance, economic, and operational clauses so managers, owners, and third parties can understand authority and financial mechanics without ambiguity.

Company Basics

Legal name, principal place of business, formation date, and the state of formation. This anchors governing law and filing references for the LLC.

Management

Statement that the LLC is manager-managed, identify the manager(s), define their authority, limits, and procedures for hiring, removal, and compensation.

Capital & Distributions

Member capital contribution amounts, accounting methods, allocation of profits and losses, distribution timing, and tax allocations consistent with IRS rules.

Transfer Restrictions

Limits on assignment or sale of membership interest, right of first refusal, buyout formulas, and events that trigger valuation or forced transfer.

Dissolution

Circumstances for voluntary and involuntary dissolution, winding-up procedures, creditor priority, and final distribution waterfall.

Amendments & Notices

How to amend the agreement, required approvals, notice addresses and methods, and recordkeeping requirements for legal and tax purposes.

Step-by-step: completing and executing the agreement

Follow these four sequential steps to prepare, approve, sign, and store a Single Member Managed LLC Operating Agreement correctly.

  • 01
    Gather documents: Collect formation certificate, EIN confirmation, and identity documents.
  • 02
    Draft terms: Fill in governance, capital, and manager authority provisions.
  • 03
    Sign and notarize: Execute with signatures; notarize if a party or bank requests it.
  • 04
    Store records: Keep signed copy in corporate file and retain digital backup.

Configuring an online eSigning workflow for this agreement

When sending the agreement for signature online, configure authentication, fields, and routing to match legal and bank requirements.

Field Configuration
Authentication Method Email link with optional SMS code for added verification
Required Fields Name, signature, date, manager designation, and attestation checkboxes
Signing Order Single-member signs first; manager or witness as required follows
Retention Options Enable PDF copy, audit trail, and export to cloud storage

Typical eSubmission flow for the operating agreement

Use a secure eSignature platform that captures intent, attribution, timestamp, and a retrievable audit trail for enforceability.

  • Upload: Add the agreement PDF or DOCX to the signing platform.
  • Prepare: Place signature, date, and initial fields for each signer.
  • Send: Deliver via email link or secure signing URL to signers.
  • Complete: Platform records signatures, timestamps, and produces a final PDF.

Platform and integration considerations for eSigning

Choose a platform that supports required authentication, audit trails, and integrations with your accounting or document systems.

  • Integrations: Salesforce, NetSuite, Google Workspace support
  • Document formats: PDF and DOCX accepted
  • Audit & security: Tamper-evident PDF and event log

Confirm the selected provider supports any required compliance (for example, a HIPAA BAA where health data is involved) and can export signed records for long-term retention.

Timing: when to finalize and distribute the agreement

While there is no universal filing deadline for operating agreements, complete and sign the document early to protect liability shields and satisfy third-party requirements.

Form at formation:

Draft the agreement when the LLC is formed or before operations begin

Sign promptly:

Execute as soon as possible to support limited liability defenses

Provide to banks:

Share signed copy when opening accounts or obtaining credit

Update on change:

Amend within 30 days of ownership or manager changes

Retain copies:

Keep signed originals and digital backups per retention policy

Common mistakes to avoid when preparing the agreement

  • Using a generic template without customizing manager powers and capital terms can create gaps that lead to disputes or unexpected tax treatment.
  • Failing to sign or to capture signer intent and attribution can undermine enforceability if a counterparty later challenges the signature.
  • Listing inconsistent company names or using a DBA instead of the legal entity name often causes bank account or contract rejections.
  • Not recording the agreement with corporate minutes or failing to provide copies to lenders can weaken limited liability protections in litigation.

Consequences of an incorrect or incomplete agreement

Loss of liability: Member may face personal exposure
Contract disputes: Unclear authority leads to invalid contracts
Tax issues: Misstated allocations cause IRS scrutiny
Bank rejections: Accounts or loans may be denied
Enforcement delay: Court proceedings may require extra proof
Higher costs: Attorney and litigation expenses increase

Representative eSignature vendor pricing and capability comparison

Common capability criteria for executing and retaining an operating agreement electronically. Vendor columns list typical starting prices and feature availability.

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 Varies Varies Varies
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No

Key security and compliance items to track

Encryption: TLS 1.2/1.3 in transit; AES-256 at rest
Audit Trail: Timestamp, IP, and action log retained
Certifications: SOC 2 Type II and ISO 27001 available
HIPAA: BAA required for protected health information
eSignature Law: Compliant with ESIGN and UETA
Accessibility: WCAG 2.0 Level AA support

Real-world examples of single-member manager agreements

These short examples illustrate how different owners use a Single Member Managed LLC Operating Agreement in practice.

Real Estate Investor

A single-member LLC holds rental property and designates an experienced manager to operate day-to-day

  • Manager handles leasing and maintenance decisions
  • The agreement documents capital calls, manager compensation, and a buy-sell clause to simplify future investor exits and lender reviews.

Software Founder

A founder is sole member but hires an outside manager to run operations while the founder focuses on product

  • Manager receives defined decision rights and reporting duties
  • The agreement clarifies IP assignment, profit distributions, and vesting-like performance triggers for manager compensation.

Frequently asked questions about the operating agreement

Answers to common legal and practical questions about completing, signing, and maintaining a Single Member Managed LLC Operating Agreement.


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