LLC Operating Agreement: What It Does and What It Should Include
By Néstor Castillero|Maera
The operating agreement defines who makes decisions, receives distributions, and bears responsibility in your Wyoming LLC. We explain what to review and how to organize it to avoid serious problems.
Many people create their company thinking that once the state approves the registration, everything is settled. But the document that truly governs internally is the operating agreement: who makes decisions, what each member contributes, how money is distributed, and what happens when someone wants to leave. In a Wyoming LLC, all of this is based on the legal framework of the Wyoming Limited Liability Company Act.
This is not the document you file with the state to form the company; it is your internal governance manual. At Maera, we always prefer to make everything clear from the start, before any disagreement among members turns into an unnecessary problem.
What Wyoming law recognizes
Here is something that confuses quite a few people: under W.S. 17-29-102(a)(xiv), this agreement may be written, oral, implied, or a combination of these, and it even applies to a single-member LLC.
That said, just because the state recognizes an oral agreement does not mean you should leave it up in the air. I always recommend having it in writing, clearly dated, and keeping every version. That way, you know for certain what was agreed, when it changed, and which rules are currently in effect. In fact, the Wyoming Secretary of State’s official guide, The Choice Is Yours, 2025 revision, sums it up very well: this document governs the vast majority of matters concerning the LLC’s management, activities, and conduct.
What it governs in Wyoming and what its limits are
Under W.S. 17-29-110, the operating agreement allows you to organize key matters:
- relationships among members and between them and the LLC itself;
- the rights and duties of anyone acting as a manager;
- the company’s activities and how they are carried out;
- the procedure for amending the agreement itself;
- management and voting rights;
- the transfer of ownership interests;
- distributions before dissolving the company; and
- any other aspect of business management.
If you do not put these points in writing or your agreement is silent on any of them, Wyoming law fills those gaps with its default rules. That is why downloading a generic template is often a mistake: you end up being governed by state rules you never discussed with your fellow members.
In addition, the freedom to set terms is not unlimited. The same section establishes clear limits that the agreement cannot eliminate, such as the obligation to act in good faith and deal fairly, or certain protections required by law. A complex provision does not become valid merely because everyone signed it.
When it becomes binding
Under W.S. 17-29-111, the LLC becomes bound by the agreement as soon as it is formed and may enforce it. Anyone who joins as a member is immediately considered subject to its terms. The rule even allows you to prepare the agreement before registering the LLC so that it takes effect the moment the company is created, even if you are the sole member.
This allows you to settle contributions, management, and authority from the outset. Even so, the final version should properly identify the company, be dated, and reflect exactly what is intended to apply.
Internal document versus public records and third parties
Keep in mind that the operating agreement is a private document: it is not filed with the Wyoming Secretary of State. What is publicly filed serves a different purpose.
W.S. 17-29-112 explains this coexistence very clearly. Among members, former members, transferees, and managers, the operating agreement controls. But in dealings with third parties—such as a bank or vendor—what appears in public records may carry weight if they reasonably relied on those records. And placing a provision prohibited by law in a public record does not make it valid. That is why, when reviewing your signing authority or limits of authority, you need to align the internal agreement with what you declare externally.
What you should include in your agreement
There is no identical list for everyone, but in Wyoming there are essential sections that I review to make sure they do not conflict with state rules:
Members and contributions
- Who the members are and what percentage or interest each one holds.
- What each person contributes: money, property, work, or future commitments.
- Whether additional contributions are contemplated and what happens if someone does not make them.
Management and voting
- Whether the company is managed directly by the members (member-managed) or by one or more appointed managers (manager-managed).
- Which decisions are made by a simple majority, supermajority, or unanimous vote.
- How decisions are called, approved, and documented.
Signing authority
- Who has authority to sign contracts, hire services, or open bank accounts on behalf of the LLC.
- What internal limits apply and how they are coordinated with documents filed externally.
Profits, losses, and distributions
- How profits or losses are divided among the members.
- When and under what conditions distributions may be made.
- How financial information is maintained and how members access the accounts.
Keep in mind that this organizes internal relationships; the IRS explains that federal tax treatment depends on how many members the LLC has and the tax elections you make with the IRS.
Transfers and personal changes
- How ownership interests are sold or transferred and whether there is a right of first refusal.
- What happens if a member decides to leave, dies, or becomes incapacitated.
- How that member’s interest is valued and what rights a former member or transferee retains.
Deadlocks, amendments, and closure
- How deadlocks are resolved if a vote is tied.
- What voting thresholds and procedures are required to amend the operating agreement.
- What events lead to dissolving the company and how its assets are liquidated.
When to seek legal review and common mistakes
If you have multiple members, investors, unequal contributions, exit formulas, or complex voting rules, you should have an attorney experienced in Wyoming review the documents. Although the state allows oral agreements, keeping yours in writing, dated, and under version control reduces serious confusion, although this does not replace professional legal advice.
Among the problems I see most often are using templates designed for another state, failing to define whether the company is member-managed or manager-managed, failing to clarify who may sign on behalf of the company, assigning percentages without defining what happens in the event of disagreements or departures, or changing the document without maintaining a dated version history.
How we help you organize it
When setting up your structure, at Maera we make sure your administrative documentation is clear and organized from day one; you can see how we support you through our plans. If your case involves multiple members or complex agreements, we will always recommend having a Wyoming attorney review the language.
If you are still evaluating the first steps for your business, in how to open an LLC in the United States, we explain where this document fits into the process. In addition, keeping your structure up to date requires addressing other state obligations: from properly appointing your LLC registered agent to complying with the Wyoming LLC annual report.
It is also essential to review whether your business activities require your Wyoming LLC to register in another state, understand the reality of asset protection in a Wyoming LLC, and know the process ahead of time in case you ever need to properly close an LLC with the state and the IRS.
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 situation should be reviewed with a qualified professional and the relevant official sources.
FAQ
Does Wyoming require the operating agreement to be written?
No. Wyoming law allows the operating agreement to be oral, implied, written, or a combination of these, as defined by W.S. 17-29-102(a)(xiv). But the fact that the law gives you that flexibility does not mean it is a good operational idea: if you leave it up in the air, you have no way to show a bank or a member what was in effect, who could sign, or how a contribution was agreed upon. I always recommend putting it in writing, with a clear date and signed by the members.
Does it work for a single-member Wyoming LLC?
Yes, absolutely. The definition in W.S. 17-29-102(a)(xiv) expressly provides for single-member LLCs, and W.S. 17-29-111 allows it to be prepared before registering the entity so that it governs as soon as registration is approved. In a single-member LLC, it helps you demonstrate ownership, define signing authority, organize succession, and support a clear separation between your personal finances and the company’s finances.
What happens if the agreement does not address a matter?
The default rules of the Wyoming Limited Liability Company Act apply, as established by W.S. 17-29-110. This means that voting, management, distributions, or member departures will be governed by state rules, even if you never discussed them with your team. If those state rules do not match what you want for your business, a Wyoming attorney should draft the appropriate provisions to replace them.
Are there provisions that the agreement cannot eliminate?
Yes. W.S. 17-29-110 itself establishes clear limits on freedom of contract. You cannot eliminate the obligation of good faith and fair dealing or remove express legal prohibitions, third-party rights, or judicial powers provided by law. Even if all members sign a provision waiving these duties, it will not be valid if the law prohibits it, so complex restrictions should be reviewed by a professional.