Single-Member LLC Operating Agreement Template

A single-member LLC operating agreement is a legal document between a company and its sole owner that sets the rules, purpose, and bylaws on how an entity will be run on a day-to-day basis. The main purpose of writing an operating agreement is to separate oneself from an entity for legal and financial liability.

Is an Operating Agreement required?

An operating agreement is required for a single-member LLC in California, Delaware, Maine, Missouri, and New York.

Main Purpose

Even though an operating agreement is not required ( except in California, Delaware, Maine, Missouri, and New York), its main purpose is to provide a level of separation between the individual owner and the entity.

For example, if the entity is liable for any legal or financial damages to a 3rd party, they will most likely request the LLC’s documentation to prove it is truly a separate entity from the owner’s assets.

By State

Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
Washington D.C.
West Virginia
Wisconsin
Wyoming

Templates (6)

eForms.com Version

NorthwestRegisteredAgent.com Version

LegalTemplates.net Version

DelawareInc.com Version

FreeForms.com Version

eSign.com Version

Paying Taxes as a Single-Member

An owner of a single-member LLC pays taxes on a pass-through basis . This means that the LLC will show its income, less expenses, with the net income “passing through” to the owner’s personal tax filing (on their IRS Form 1040).

How to File Taxes as a Single-Member LLC

If an LLC does not elect to be a corporation within its initial 75 days, it will be taxed as a partnership or “disregarded entity.” Therefore, the members will provide any income from the entity on IRS Form 1040 (Schedule C).

If an LLC does elect to be a corporation, the entity must file IRS Form 1120.

How to Pay Yourself as a Single-Member LLC

There are 2 ways to pay oneself as a single-member LLC:

Salary – Commonly set up with a payroll provider and with payments made on a weekly basis. The net amount is paid to the member with deductions taken out for income (State and Federal), Social Security, and Medicare taxes.
Distributions – Generally paid quarterly without Social Security and Medicare taxes (totaling 15.3%).

Single-Member LLC vs Sole Proprietorship

LLC	Sole Proprietorship
How to Register?	Must be incorporated through a form called an “Articles of Organization” and filed with the State.	A “trade name” or “fictitious trade name” must be registered through the State. Any business permits must be obtained through the trade name.
Partners Allowed?	No	No
Is an EIN Required?	Yes	No, unless there are employees.
Liability Protection?	Yes	No
Annual Renewal?	Yes	No
Filing Taxes	Can elect to be taxed as a partnership or corporation.	File taxes through their personal return.