North Carolina LLC Operating Agreement
Every North Carolina LLC should have an operating agreement in place.
While not legally required by the state, having a written operating agreement will set clear rules and expectations for the management and operations of your LLC.
Download our free North Carolina operating agreement template below or sign up to create a custom operating agreement using our free tool.
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Free North Carolina LLC Operating Agreement Templates
We offer operating agreement templates for single-member LLCs and multi-member LLCs (including member-managed and manager-managed) as well as a customizable operating agreement tool.
Single-Member LLC Operating Agreement
Our single-member LLC operating agreement template was created for limited liability companies with only one member, where the sole member has full control over all affairs of the LLC and no other individuals have a membership interest in the company.
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Multi-Member LLC Operating Agreements
Our multi-member LLC templates are meant for LLCs with more than one member. There are two types available: manager-managed and member-managed.
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Create Custom Operating Agreement
Create a custom operating agreement using our free tool. Just answer a few basic questions, and the tool will develop an operating agreement for your new LLC.
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What Is a North Carolina LLC Operating Agreement?
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An operating agreement is a legal document that outlines the ownership structure and operating procedures of an LLC.
Whether you are starting a single-member or multi-member LLC, your operating agreement should address all of the topics below. Some of these stipulations will not have much bearing on the actual operations of a single-member LLC, but are still important to include for the sake of legal formality.
- Organization: When the LLC was officially formed, who its members are, and how ownership is divided. Multi-member LLCs may utilize an equal ownership structure or assign various members different “units” of ownership.
- Management & Voting: Whether the LLC will be managed by its members or by an appointed manager, and how members will go about voting on business matters. Typically, each member has one vote, but you may wish to give some members more voting power than others. For more information on managing your LLC, read our Member-Managed vs Manager-Managed guide.
- Capital Contributions: The amount of money each member has invested in the business. This is also where you should establish an approach to raising additional funds in the future.
- Distributions: How profits and losses will be divided among the members. The most common option is to distribute profits evenly. If you want them divided a different way, this should be detailed in your operating agreement. For more information on the basics of LLC ownership, read our Contributions and Distributions guide.
- Changes to Membership Structure: How roles and ownership will be transferred in the event that a member leaves the company. It’s essential to lay out the process for buying out and/or replacing a member in the LLC’s governing document.
- Dissolution: Dissolution: If at some point all the members of your LLC decide you no longer wish to conduct business, you should officially dissolve it. Outlining the hypothetical process of dissolving your business is an important aspect of your operating agreement. To learn how to dissolve your North Carolina LLC, read our North Carolina LLC Dissolution article.
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Why Should I Have a North Carolina LLC Operating Agreement?
No matter what type of North Carolina LLC you're starting, you'll want to create an operating agreement. Here's why:
- It’s recommended by the state. According to the North Carolina General Statutes, Limited Liability Company Act § 57D-2-30, all members of a North Carolina LLC may enter into an operating agreement to regulate the internal affairs of the company.
- It'll prevent conflict among your business partners. If you're starting a multi-member LLC, having an operating agreement will prevent misunderstandings amongst your team by setting clear expectations about each partner's role and responsibilities.
- It helps preserve your limited liability status. If you're the sole owner of a single-member LLC in North Carolina, having an operating agreement will help to ensure your limited liability status is upheld by court officials, and add to your business's credibility as a whole.
The full text of the statute can be found below:
(a) The operating agreement governs the internal affairs of an LLC and the rights,
duties, and obligations of (i) the interest owners, and the rights of any other persons to become
interest owners, in relation to each other, the LLC, and their ownership interests or rights to
acquire ownership interests and (ii) the company officials in relation to each other, the LLC,
and the interest owners. Subject to the limitations set forth in subsections (b), (c), (d), and (e) of
this section, the provisions of this Chapter and common law will apply only to the extent
contrary or inconsistent provisions are not made in, or are not otherwise supplanted, varied,
disclaimed, or nullified by, the operating agreement. The provisions of the operating agreement
are severable and each will apply to the extent it is valid and enforceable.
(b) The operating agreement may not do any of the following:
(1) Supplant, vary, disclaim, or nullify the provisions of this Chapter or their
application to the extent the provisions:
a. Concern the functions of, including the filings and payments to be
made, and the manner in which they are to be made by or to the
Secretary of State, the Attorney General, the courts, or any other
governmental official, agency, or authority, including Articles 1 and
9 of this Chapter, G.S. 57D-2-21(a), 57D-2-22(a), 57D-2-23,
57D-2-24, 57D-2-40, 57D-6-02(1), 57D-6-03(a) through (c),
57D-6-04, 57D-6-05, 57D-6-06, the last sentence of
G.S. 57D-6-07(c), 57D-6-09, and 57D-10-01; except, the operating
agreement may provide the forum in which disputes concerning the
LLC or the rights and duties of interest owners and other parties to
the operating agreement are to be resolved and other decisions and
the manner in which decisions of interest owners and other parties to
the operating agreement are to be made.
b. Apply to persons who are not parties to or otherwise bound by the
operating agreement, including the extent to which G.S. 57D-5-03
may be applicable to such persons or for which they may be entitled
to recovery or other relief thereunder, or the extent to which
G.S. 57D-1-02, 57D-6-08(1), 57D-6-10, 57D-6-11, 57D-6-12, and
57D-6-13 are applicable to such persons.
c. Are set forth in this section, G.S. 57D-1-01, 57D-2-01(d), 57D-2-02,
57D-2-03, 57D-2-20, 57D-3-23, 57D-5-01, 57D-6-01, clause (ii) of
57D-6-02(2), and 57D-6-07(b) and (f).
(2) Recodified as G.S. 57D-2-30(b)(1)b.
(3) Diminish the rights and protections of the LLC under G.S. 57D-4-05 and
(4) Diminish the rights and protections of members under G.S. 57D-3-04(a),
except as permitted by and otherwise subject to subsections (b) through (f)
of G.S. 57D-3-04.
(5) Eliminate the right of a member to bring a derivative action under Article 8
of this Chapter unless the operating agreement provides an alternative
remedy, which may include the right to bring a direct action in lieu of a
derivative action or modifying the procedures provided in Article 8 of this
Chapter governing derivative actions.
(6) Eliminate the right of a member to bring an action to have the LLC judicially
dissolved under clause (i) in G.S. 57D-6-02(2), unless the operating
agreement provides an alternative remedy.
(7) Recodified as G.S. 57D-2-30(b)(1)c.
(c) Oral or implied provisions in the operating agreement may not supplant, vary,
disclaim, or nullify any contrary or inconsistent written provisions in the operating agreement
to the detriment of the rights of persons who are not parties to the operating agreement to the
extent that they reasonably rely on those written provisions in the operating agreement.
(d) In the event of a conflict between the operating agreement and a provision in any
document of an LLC filed by the Secretary of State:
(1) The operating agreement shall prevail as to parties to the operating
agreement and company officials.
(2) The document filed by the Secretary of State shall prevail as to persons who
are not parties to the operating agreement and are not company officials to
the extent that they reasonably rely on the document filed by the Secretary of
(e) Except as provided in or permitted by this Chapter or other applicable law, the laws
of agency and contract, including the implied contractual covenant of good faith and fair
dealing and the requirement that the terms of an operating agreement not be unconscionable at
the time they are made, govern the administration and enforcement of operating agreements.
After Creating Your North Carolina LLC Operating Agreement
Once you have finished your operating agreement, you do not need to file it with your state. Keep it for your records and give copies to the members of your LLC.
Following any major company event, such as adding or losing a member, it is a good idea to review and consider updating the operating agreement. Depending on how your operating agreement is written, it may require some or all of the members to approve an amendment to the document.
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Frequently Asked Questions
Yes. Although you won’t file this document with the state, having an operating agreement in place is the best way to maintain control of your North Carolina LLC in the face of change or chaos.
While it's a good idea to create an operating agreement before filing your Articles of Organization, the state does not discourage LLCs from waiting until the formation process is complete. It's worth noting that some banks require you to submit an operating agreement in order to open a business bank account.
No. Operating agreements are to be retained by the LLC members. There is no need to file your operating agreement with the North Carolina Secretary of State.