What is a Single-Member LLC Operating Agreement?

One person can form an LLC in Delaware. These LLCs are known as “single-member LLCs”. You can use a single-member LLC for everything from financing real estate transactions to solo consultant practices.

Why Create a Single Member LLC Operating Agreement?

Despite having only one member, it is still wise for single-member LLCs to have a written and executed Operating Agreement. The Operating Agreement establishes the separateness of the LLC and its single member and supports the fact that the LLC is not an “alter-ego” of the single member. Avoiding the pitfall of alter-ego liability is a top priority for the single member and an important reason why they should form a single member LLC instead of operating as a sole proprietorship. A written Operating Agreement also establishes ownership of the LLC by the single member. Executing an operating agreement is simpler and more affordable than battling over ownership with other parties.

The single member should sign the Operating Agreement in both her capacity as member and as the authorized signer on behalf of the LLC in the signature block.

What Does a Single Member LLC Operating Agreement Look Like?

Below please find a sample single-member Delaware LLC Agreement. Members would sign and date the Agreement after filling-in the principal place of business (Article 1.5), capital contributions (Article 3.2), Voting and Non-Voting Units (Article 3.5), the name of the “Tax-Matters Member” (Article 6.3), Company Management and Officer names (Article 7.1), and company and member addresses (Article 11.1).

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