Every Washington LLC should have an Operating Agreement, but getting one doesn’t have to be expensive. You can download and customize your own Operating Agreement using our free template below.
Washington LLC Operating Agreement (Member-managed)
Washington LLC Operating Agreement (Manager-managed)
What is a Washington LLC Operating Agreement?
A Washington LLC Operating Agreement is a written contract between the LLC Members (LLC owners). This legal document includes detailed information about LLC ownership structure, who owns the company and how the LLC is managed.
Single-Member LLCs and Multi-Member LLCs should draft an Operating Agreement, keep it with their business records, and give a copy to all Members.
What should be included in LLC Operating Agreements?
Basic Information
Your Operating Agreement will include basic information about your Limited Liability Company. Some of the information will be the same as what is listed in your Washington LLC Certificate of Formation. Operating Agreements should include:
- LLC Name
- LLC effective date
- Washington Registered Agent (if applicable)
- purpose of your LLC
- duration of your LLC
- and how your LLC will be taxed
Related Reading: Is a Registered Agent a Member of an LLC?
LLC Ownership
Your Operating Agreement will list all the LLC Members and how much of the Limited Liability Company they each own.
How much of the LLC someone owns is called their “LLC Membership Interest”.
LLC Membership Interest is most often expressed as a percentage (like 5%, 50%, 100%, etc.).
Initial Capital Contributions (putting money into your LLC)
After your LLC is approved, you should open an LLC bank account and put money into that account.
Each of the LLC Members makes an initial capital contribution. Capital contribution simply means a deposit of money into the LLC bank account.
You will list the initial capital contributions in your LLC’s Operating Agreement.
Pro tip: If you complete your Operating Agreement before you have opened an LLC bank account, just enter the amount the Members plan to deposit. If the amount of your deposit changes, it’s okay to edit your Operating Agreement with the actual amounts later.
- Related article: To learn more about capital contributions, like how much you should contribute, check out LLC Capital Contributions.
Statement about taxes
You will list how your LLC will be taxed in your Operating Agreement. There are four common ways an LLC can be taxed:
- LLC taxed as a Sole Proprietorship
- LLC taxed as a Partnership
- LLC taxed as an S-Corporation
- LLC taxed as a C-Corporation
Voting Rights of LLC Members
The rules of membership voting will be spelled out in your Washington LLC’s Operating Agreement.
If you use the Member-managed Operating Agreement, the voting powers are proportionate to the LLC Membership Interest.
If you use the Manager-managed Operating Agreement, the voting powers are also proportionate to the LLC Membership Interest. Then the Members vote to elect one or more Managers. The Manager(s) then has authority to make certain decisions on behalf of the LLC (without needing a vote by the Members).
However, certain things, like adding or removing an LLC Member, require a vote of the Members (and the Manager has no say).
Make sure all LLC Members have a copy
Once you finalize your Operating Agreement, make sure all the Members have a copy.
We recommend keeping a copy of the Operating Agreement with your LLC business records.
Operating Agreement FAQs
As per Section 25.15.018 of the Washington LLC Act, an Operating Agreement (aka Limited Liability Company Agreement) isn’t required for Limited Liability Companies in Washington.
But while it’s not required in Washington to conduct business, we strongly recommend having an Operating Agreement for your LLC.
Additionally, financial institutions (like banks) and other organizations may need to see a copy of this paperwork in order for you to do business with them.
It’s best to have an Operating Agreement, even if you are the only Member of your Washington LLC (a Single-Member LLC).
If you go to court, a Single-Member Operating Agreement helps prove that your Single-Member LLC is being run as a separate legal entity. This confirms the company’s limited liability status, and that is what protects your personal assets.
It’s best to have an Operating Agreement, especially for a Limited Liability Company with multiple Members (a Multi-Member LLC). This document will spell out ownership percentage, profit distribution, and management structure.
If you go to court, an Operating Agreement helps prove that your Multi-member LLC is being run as a separate legal entity.
No, you don’t have to send your Operating Agreement to the Washington Secretary of State, the Washington Department of Financial Institutions, or any other government agency. (That’s why there is no “filing fee” or processing fee for an Operating Agreement.)
Operating Agreements are “internal documents”. Meaning, the Members just need to keep a copy with their business records.
Operating Agreements are legal documents that are binding upon the LLC Members because of the Members’ signatures. It doesn’t need a government stamp of approval.
However, in the future, if your company were involved in a lawsuit or an audit, a court or government agency might ask to see a copy of your Operating Agreement.
Additionally, you may also need to show this document to:
- financial institutions when you open a business bank account
- financial institutions if you apply for a loan for the LLC
- a title company if your LLC is buying real estate
No, your Operating Agreement doesn’t need to be notarized. Each Member just needs to sign it.
Once you (and the other LLC Members, if applicable) sign the Operating Agreement, then it becomes a legal document.
Yes, but we recommend using an Operating Agreement template.
An Operating Agreement is a legal document. You don’t have to hire a business attorney or an attorney to write one, though. Using a template helps make sure you cover everything you need to.
LLC University® offers free Operating Agreement templates that you can download and customize to write your own LLC Operating Agreement.
If you wanted to write a simple Washington Operating Agreement without using a template, you could. You’d need to check with the Washington LLC Act to make sure it meets all the requirements.
For example, at a minimum, you’d want your Washington LLC name, your Registered Agent information, your business purpose, the names of the LLC Members, and information about initial capital contributions.
However, there is a lot more information that is important to document about your LLC.
It’s probably a lot easier to start with an existing template. We have a free Operating Agreement template you can download on this page.
An LLC (Limited Liability Company) is a type of business structure. It’s a legal business entity that you form by filing a document called the Certificate of Formation with the state.
An Operating Agreement is an internal document that governs how your LLC is run. It contains rules about how much of the company each Member of the LLC owns, and other details about management and taxes.
Said another way, the LLC is your legal entity. And the Operating Agreement is a written set of rules for how the LLC will operate.
You could have an LLC without an Operating Agreement (but you shouldn’t). But you can’t have an Operating Agreement without an LLC.
Here are the steps to starting an LLC in Washington:
- Choose an LLC name and make sure it’s available
- Choose who will be your Washington Registered Agent
- File the Washington LLC Certificate of Formation
- Complete and sign an LLC Operating Agreement
- Get an Employer Identification Number (EIN) from the IRS
- Research business license requirements
- Open an LLC bank account
Matt holds a Bachelor's Degree in business from Drexel University with a concentration in business law. He performs extensive research and analysis to convert state laws into simple instructions anyone can follow to form their LLC - all for free! Read more about Matt Horwitz and LLC University.
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Great video and helpful tool! THANK YOU!
Thanks Chelle! You’re very welcome :)
I have been asked by my attorney to change the name of the owner of the LLC (100% myself) to the name of my “Revokable Living Trust” (also me). This is a Washington State LLC. How do I do this? I am unclear on how to proceed, and would appreciate your thought on what I need to do.
Thank you! Mary
Hi Mary, I apologize for our slow reply. You’ll likely want to contact a business attorney for help. You’ll want to sign an Assignment of LLC Membership transferring you’re 100% ownership to your Trust. And you’ll want to amend the LLC’s Operating Agreement. Then you’ll need to update the Washington Secretary of State and the Washington Department of Revenue. And then let your accountant know about these changes. Hope that helps.
Hi Matt, great article and site, thanks!
2 questions:
1) I’m setting up a single member LLC. If I’m given a W-9, is it better to put my SSN or my LLC’s EIN? What are the potential consequences of either decision? A friend suggested that I use the business EIN; however, I’m seeing a quote on this IRS article that says to use your personal SSN or EIN for a Single-Member LLC. Quote — “For example, if a disregarded entity LLC that is owned by an individual is required to provide a Form W-9, Request for Taxpayer Identification Number (TIN) and Certification, the W-9 should provide the owner’s SSN or EIN, not the LLC’s EIN.” https://www.irs.gov/businesses/small-businesses-self-employed/single-member-limited-liability-companies
What are your thoughts on this quote above?
2) For an SMLLC, do you recommend the Manager or Member operating agreement?
Thanks very much!
Hi Ben, thanks! Regarding the W9 for LLC, I always use the EIN instead of the SSN for Single-Member LLCs. There are never any penalties enforced and I’d much rather give out an EIN than an SSN. You’re going to report the 1099 income anyway on your personal tax return, so it doesn’t make much difference. Regarding Member-managed LLC vs Manager-managed LLC, it’s quite insignificant for a Single-Member LLC. A slight “advantage” (if it’s applicable to you) is if you have a Manager-managed LLC and you are the Manager, it doesn’t imply that you are the owner (although you are… you’re the Member and the Manager). If you have a Member-managed LLC, then you are the Member, which many know to mean the owner. Hope that helps.
Hi Mike
This was really helpful for me. I’m setting up a sole member LLC and wondered if there was a simpler Operating Agreement, or if it was even necessary in this case? I was also advised by accountant that a sole member LLC is not recognized by the federal government, and that I would be filing on my individual taxes. In this case, is it necessary to file for an EIN as I will be using my SSN?
Thanks!
Ellen
Hi Ellen, no, we don’t have another Operating Agreement template at this time. We definitely recommend having an LLC Operating Agreement. The LLC, by default, isn’t recognized by the IRS for tax purposes. By default the IRS treats a Single-Member LLC owned by a US taxpayer like a Sole Proprietorship. This doesn’t take away the legal protections provided by an LLC though. We recommend getting an EIN as it makes it easier to open an LLC bank account. It also gives you flexibility if you change the tax treatment of your LLC in the future. And it’s much better to give out an EIN instead of an SSN. Hope that helps.
Thanks Matt! I don’t think I could have submitted my LLC request today without your site – or at least not so knowledgeably! Thanks. I’ll tackle the EIN with confidence after having watched your video once i get the certificate back. Then on to operating agreement.
Thanks
You’re welcome Ellen! I always find it helpful to learn about what I’m doing. Awesome! Let me know if you have any follow up questions.