LLC Operating Agreement: What It Is For and What It Should Include

The operating agreement is the internal document that organizes how an LLC operates: who makes decisions, what each member contributes, how profits and losses are distributed, and what happens when someone wants to leave. For an LLC formed in Wyoming, this agreement operates within the framework of the Wyoming Limited Liability Company Act.

It is not the document that creates the company with the state. It is the internal reference for governing it. At Maera, we prefer to put it in order from the outset, before a disagreement between members becomes a problem.

What Wyoming law recognizes

The definition in W.S. 17-29-102(a)(xiv) is broad: the operating agreement may be oral, contained in a record, implied, or a combination of those forms. It may also exist in a single-member LLC.

The fact that Wyoming allows an oral or implied agreement does not mean that leaving it unwritten is a good practice. We recommend documenting it in writing, dating it, and keeping each version. This makes it clearer what was agreed upon, when it changed, and which rules are in effect.

The official guide The Choice Is Yours, 2025 revision, from the Wyoming Secretary of State, summarizes that the operating agreement governs most aspects of an LLC’s management, activities, and conduct.

What it governs in Wyoming and what its limits are

According to W.S. 17-29-110, the agreement may govern, among other matters:

• relationships among the members and between the members and the LLC;
• the rights and duties of a person acting as a manager;
• the company’s activities and how they are conducted;
• the procedure for amending the agreement itself;
• management and voting rights;
• transfers of ownership interests;
• distributions before dissolution; and
• other aspects of managing the LLC.

When the agreement does not address one of these matters, Wyoming statutory rules apply. That is why an incomplete template may leave important decisions subject to state rules that the members never discussed.

The freedom to set terms is not absolute either. W.S. 17-29-110 itself establishes limits that the agreement cannot eliminate or modify. These include the contractual obligation of good faith and fair dealing, along with other protections and powers provided by law. A complex provision should not be assumed valid just because everyone signed it.

When it becomes binding

W.S. 17-29-111 provides that the LLC is bound by the agreement and may enforce it. A person who becomes a member is deemed to have agreed to its terms. The statute also allows the agreement to be prepared before the LLC is formed so that it becomes the company’s operating agreement upon formation, including for a single-member LLC.

This makes it possible to organize contributions, management, and authority from the outset. Even so, the final version should identify the company, be dated, and accurately reflect what its members want to apply.

Internal agreement, public documents, and third parties

The operating agreement is an internal document. We do not state that it must always be filed with the Wyoming Secretary of State. Documents that are publicly filed—for example, certain LLC records—serve a different purpose.

W.S. 17-29-112 explains the relationship among the agreement, those records, and third parties. If there is a conflict, the agreement prevails among members, former members, transferees, and managers; as to other persons, the public record may prevail to the extent they reasonably relied on it. In addition, placing a provision that the law prohibits in a public document does not make it valid.

In practical terms: the internal agreement and the documents filed with the state should be reviewed together. Signing authority or limitations on authority deserve special attention when they may affect banks, vendors, investors, or other third parties.

What it should include

There is no universal list that works equally well for everyone. In Wyoming, each section must align with the matters that the law allows the agreement to govern and with the state rules that will apply when the agreement is silent.

Members and contributions

• Who the members are and what percentage or interest each one holds.
• What each person contributes: money, property, services, or future commitments.
• Whether there will be additional contributions and what happens if someone does not make them.

Management and voting

• Whether the LLC will be managed by its members (member-managed) or by one or more managers (manager-managed).
• Which decisions require a majority, supermajority, or unanimous vote.
• How decisions are called, approved, and documented.

Signing authority

• Who may enter into contracts, open accounts, or assume obligations on behalf of the LLC.
• What internal limits apply and how they are coordinated with any applicable public record.

Profits, losses, and distributions

• How profits and losses are allocated among the members.
• When and under what conditions distributions are made.
• How financial information and members’ access to it are documented.

The agreement organizes these internal relationships, but it does not by itself determine federal tax classification. The IRS explains that federal treatment depends on the number of members and the tax elections made by the LLC.

Transfers and personal changes

• How ownership interests are transferred and whether there is a right of first refusal.
• What happens if a member leaves, dies, or becomes incapacitated.
• How an ownership interest is valued and what rights a former member or transferee retains.

Deadlocks, amendments, and closing

• How deadlocks among members are resolved.
• What procedure and voting threshold are required to amend the agreement.
• What events trigger dissolution and how winding up is carried out.

When we recommend legal review

We recommend review by an attorney experienced in Wyoming law when there are multiple members, investors, unequal contributions, special voting rights, transfer restrictions, buyout or exit formulas, or any complex provision.

We also recommend keeping the agreement in writing, dated, and under version control even though the law permits other forms. That discipline helps reduce ambiguity, but it does not replace legal advice or guarantee that every provision will be valid or produce the expected result.

Common mistakes

• Using a template from another state without adapting it to Wyoming.
• Failing to define whether the LLC is managed by members or by managers.
• Not clarifying who may sign or bind the company.
• Allocating percentages without addressing voting, distributions, exits, or deadlocks.
• Amending the agreement without a date or version history.
• Confusing the internal document with publicly filed records.

How we approach it

When we help form or maintain an LLC, we work to keep the administrative documentation organized and accessible from day one. You can review the scope in our plans.

We also distinguish our administrative work from legal advice. If the agreement involves multiple members, investors, unequal contributions, or complex provisions, we recommend having a Wyoming attorney review the language.

If you are still organizing the formation, in how to open an LLC in the United States we explain where this document fits in the process. And in our guide to an LLC registered agent, we explain another state requirement that is separate from the operating agreement.

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At Maera, we provide administrative services. We are not a law firm or an accounting firm, and we do not provide legal, tax, or investment advice. Each case should be reviewed with a professional and against the applicable official sources.