California LLC Operating Agreement Template [PDF]

The California limited liability company (LLC) operating agreement is a legal document that outlines the day-to-day operation of the company and defines the status of each member within it.

The parties are free to draft the operation agreement according to their specific needs as long as the provisions within the document are not in collision with federal and state laws and regulations. Therefore, the parties use it to define the company’s operation rules in more detail.

Is an Operating Agreement Required in California?

Yes, California state law requires all limited liability companies to have the operating agreement in writing and keep it in their offices.

Moreover, the LLC must also keep all the amendments to the operating agreement, if any, as well as any power of attorney based on which the operating agreement is executed.

4 Main Types of Operating Agreements

In California, you have four main types of operating agreements you can choose to draft for your LLC:

Types of Operating Agreements

Single-member LLC operating agreement: Used for defining the organization of an LLC with only one member.
Multi-member LLC operating agreement: Outlines the organization and relationship within an LLC with two or more members.
Member-managed LLC operating agreement: Designed for LLCs where members want to actively participate in the decision-making process.
Manager-managed LLC operating agreement: Used when LLC members want to delegate decision-making to the professional manager within the company.

Laws and Legal Requirements for LLC Operating Agreements in California

Title 2.6 of the California Revised Uniform Limited Liability Company Act regulates the status of LLCs in California and provides the following regulations for the operating agreement:

Laws and Legal Requirements

§ 17701.07: Regulates enforceability of operating agreements.
§ 17701.10: Regulates the scope of governance.
§ 17701.11: Regulates member agreement to terms.
§ 17701.12: Regulates amendments.

How to Form a Limited Liability Company (LLC) in California

The easiest way to form a limited liability company in California is by following the steps below:

How to Form a LLC in California

#1. Find a Business Name For Your LLC

The first step in this process is to name your LLC. The business name of your LLC must be distinguishable from business names used by other companies in California.

To check if your business name is distinguishable, you can go to the California Secretary of State Business Search or file the Name Availability Inquiry Letter.

#2. Nominate an Agent

The agent is the individual or company that will accept the legal documents on behalf of the LLC. The agent can be an LLC itself, a manager, a member of the LLC, or a third party not affiliated with the LLC.

The only condition is that the agent resides in California and that their address is listed in the articles of organization. Besides the formal requirements, an agent must be a person you trust since they will be a point of formal communication between your LLC and third parties.

#3. File the Articles of Organization

For a domestic LLC, you can file the articles of organization online or by submitting a Form LLC-1.

For a foreign LLC, you should submit the Application to Register a Foreign LLC by completing the Form LLC-5.

If you decide to submit your documents in person or via mail, you should file all your documents at the following address: Business Entities, P.O. Box 944228, Sacramento, CA 94244-2280.

#4. Pay the Required Fee

When submitting your application, you should also pay the filing fee of $70. The fee is the same for both the domestic and foreign LLCs. However, if you decide to submit your documents in person, you should pay an additional $15 fee.

#5. Create your LLC Operating Agreement

The state of California requires all the LLCs registered in the state to have a written operating agreement (also known as the business operating agreement). You can choose between a single-member or multi-member operating agreement based on how many members are listed for the LLC.

#6. File a Statement of Information

The state law provides that the LLC must submit the statement of information no later than 90 days from the moment of filing the organization articles.

A statement of information must include basic information about the company, such as their name, address of their office, mailing address, address of their agent, registration number, and email address.

#7. Apply For an Employer Identification Number (EIN)

After registering your company, you must apply for the employer identification number. It is a number that helps the Internal Revenue Service (IRS) identify your company for tax purposes. You can apply for an EIN online or by submitting Form SS-4.