A Virginia operating agreement is a legal document that establishes the rules and structure of your LLC. Your operating agreement is a legally binding agreement between you and your members on how your LLC will handle important procedures like voting, transferring membership interest, allocating profits and losses, and dissolution, should the time come. You can use one of our attorney-drafted templates to fill out, save, and download your operating agreement for free.
An operating agreement is an internal document, so you don’t need to file it with the Virginia Secretary of State. But having an operating agreement on file that fits your LLC’s needs is essential. That’s why at Northwest, we offer attorney-drafted operating agreement templates for a range of situations.
Your operating agreement is the blueprint for how your Virginia LLC will function internally. Technically, it could include anything not prohibited by Virginia state statutes, but a strong operating agreement should cover:
Want to focus on your business and leave the legal hullabaloo to us? Our lawyers drafted a comprehensive operating agreement you can use for free. You can even fill it out on this page, save it in a free account for later, and download a completed draft to sign.
In order to fill out our free operating agreement template, you’ll need your:
This must be your business’ legal entity name, or the name you put on your LLC Articles of Organization.
Did an LLC member contribute $500? $5k? A storefront? Put that here.
You’ll just write in 16 here since our version has a set amount of pages.
Remember, this is an internal document, so you won’t have to submit these names to the state just because they’re on here. However, you might need to add these people to your BOI Report.
Include any initial contributions, even if it’s only a small percentage.
While we recommend having a business bank account, some banks like to actually see the operating agreement before you open the account. If that’s the case, you can leave this blank for now.
This is the place your business operates from.
You can add this in later if you aren’t sure when your meeting will be held.
There’s a few different spots where you’ll need to add at least one members’ signature. These are on pages 13, 14, 15, and 16 on our template.
A Virginia LLC should have an operating agreement because a company cannot act for itself. In order to operate, LLCs require real humans (and other entities) to carry out company operations.
According to VA Code § 13.1-1023 (2019), an operating agreement isn’t actually required in Virginia—and if you have one, it “need not be in writing.” But don’t be fooled. Having a strong operating agreement—on paper—is essential for your LLC. Here’s why:
You aren’t required to include the name of all (or any) members of your LLC when filing your Virginia Articles of Organization—which is great for privacy, but isn’t so helpful for showing proof of ownership. This is where your operating agreement comes into play.
Your operating agreement includes the names of all LLC members, which means you can use it to show you own your business. You’ll need it to open a business bank account.
To benefit from limited liability status, you must take certain steps to show your LLC is its own legal entity separate from its owners. One way to do this is to open a business bank account for your company finances. Another way is to create (and follow) an operating agreement.
Virginia’s state code states that “a limited liability company is bound by its operating agreement,” which means members are obligated to follow the rules and procedures it lays out. Should an argument or misunderstanding arise, those written rules and procedures should nip it in the bud.
Any Virginia LLC without an operating agreement will automatically be governed by default statutes in the Virginia Limited Liability Company Act. The problem is that Virginia’s default laws might not fit your company. Adopting an operating agreement ensures you can operate your business (within the bounds of the law) in a way that works for your LLC.
We asked our lawyers for an example of how an operating agreement can make or break your LLC. Here’s what they said.*
“Consider the case of Cotton Creek Circles LLC, where a dispute among the members led to an arbitration proceeding and subsequent ruling which allowed a member to seemingly continue with a separate business opportunity that the other members believed to be explicitly against the adopted operating agreement. Ultimately, the courts sided with the arbitrator, upholding the propriety of the member’s separate business opportunity over the discontent of the other members.
“The Cotton Creek case is an excellent example of the importance of clearly expressing and stating the members’ intent in an operating agreement. Assuming good faith on all parties, had the members thought ahead and thoroughly discussed the permissibility for members to engage in non-competitive yet geographically proximate business endeavors, both litigation and arbitration could have been avoided, and valuable resources could have been preserved for more fulfilling purposes. For these reasons (and more), a reasonably prudent business owner would (and should) adopt and maintain an operating agreement.”
Technically, an operating agreement can include anything (within the law) not already covered by Virginia’s statutes. But a strong operating agreement is essential, and should include information about:
Northwest offers a range of attorney-drafted, Virginia-specific operating agreement templates, free of charge. Choose the one that fits your LLC’s structure.