Texas Llc Operating Agreement Member Managed

Starting a business in Texas is an exciting endeavor, but it`s essential to have the proper legal documents in place to ensure that your business operates smoothly. One of the critical documents that every limited liability company (LLC) in Texas must have is an operating agreement. An operating agreement is a legal document that outlines the guidelines, rules, and structure of an LLC. Not having an operating agreement in place can cause legal issues and lead to significant problems down the line.

In Texas, there are two types of LLCs: member-managed and manager-managed. In a member-managed LLC, the members of the LLC manage the business directly. In contrast, in a manager-managed LLC, the members appoint a manager to oversee the business`s day-to-day operations. This article will focus on Texas LLCs that are member-managed, and what to include in a Texas LLC operating agreement.

The Basics of a Texas LLC Operating Agreement

A Texas LLC operating agreement is a legal document that outlines the LLC`s management, ownership, and members` rights and responsibilities. The operating agreement is an essential document that governs the LLC`s internal operations and can help prevent disputes among members. While Texas law does not require LLCs to have an operating agreement, it`s highly recommended to have one in place to avoid confusion and protect the LLC`s best interests.

Here are some of the key elements that should be included in a member-managed Texas LLC operating agreement:

1. Management Structure: A member-managed LLC operating agreement should define the management structure of the LLC. This includes outlining the roles and responsibilities of each member and how decisions are made.

2. Voting Rights: The operating agreement should outline the voting rights of each member. This includes how votes are cast, how many votes are needed for a decision to be made, and when a vote can be called.

3. Profit and Loss Distribution: An operating agreement should detail how the LLC`s profits and losses will be split among members. This includes outlining each member`s share and how that share will be determined.

4. Capital Contributions: The operating agreement should outline the amount of money each member is required to contribute to the LLC and when those contributions are due.

5. Dissolution: The operating agreement should also outline the process for dissolving the LLC. This includes how the LLC`s assets will be distributed, how outstanding debts will be paid, and who will handle the dissolution process.


A member-managed Texas LLC operating agreement is a critical document that outlines the rules, guidelines, and structure of the LLC. It`s essential to have an operating agreement in place to ensure that the LLC operates smoothly and to avoid disputes among members. When creating an operating agreement, it`s important to include all the necessary elements such as management structure, voting rights, profit and loss distribution, capital contributions, and dissolution. By having a comprehensive operating agreement, LLC members can protect their business`s interests and ensure its long-term success.