A single-member LLC operating agreement is usually not legally required in Maryland, D.C., or Texas, but it is still one of the most useful documents a solo owner can have. It records that the business is truly separate from you, answers the questions your bank will ask, and, most importantly, says who takes over if you die or become incapacitated.

Do I need an operating agreement for a single-member LLC?

In Maryland, Washington, D.C., and Texas, the law generally does not require an LLC to have a written operating agreement, even with one owner. If you don’t have one, the state’s default LLC rules fill the gaps. Those defaults were written for the average company, not yours, and some of them (especially what happens when the sole owner dies) can produce results you would not choose.

An operating agreement is the private contract that governs how your LLC is owned and run. It is not filed with the state. Texas calls it a “company agreement” (Tex. Bus. Orgs. Code § 101.052), and the Texas Secretary of State confirms that internal governing documents are kept by the company rather than filed.

Does an operating agreement protect my personal assets?

An operating agreement can help support your LLC’s liability protection, though no document guarantees it. Courts in some cases disregard an LLC and hold the owner personally liable, called “piercing the veil,” particularly where the owner treated the company’s money and decisions as their own or used it to commit fraud.

A single-member LLC can be especially exposed to that argument, because there is no co-owner to force separation. A signed agreement that treats the LLC as its own entity, paired with separate bank accounts, company-name contracts, and documented capital contributions, can help show the company is real. The agreement alone is not enough; how you actually run the business matters just as much.

Will my bank ask for an operating agreement?

Often, yes. Many banks ask for a copy of the operating agreement when you open a business account or apply for credit, to confirm who owns the LLC and who is authorized to sign. Lenders, landlords, title companies, and payment processors may ask as well. Having a signed agreement ready can make those steps faster.

What happens to a single-member LLC when the owner dies?

When the only member of an LLC dies, the company can face dissolution unless someone steps in within a deadline set by state law. Your heirs may inherit the economic rights to the business, but without clear instructions there can be uncertainty about who can manage it, sign checks, pay employees, or access accounts in the meantime.

A well-drafted agreement can name a successor member or manager, say who receives your interest, and give that person authority to act quickly. It works best alongside your estate plan. For example, many owners assign their LLC interest to a revocable living trust so it can pass without probate. For more, see: Will vs. Living Trust: Which One Makes Sense for Your Family?

Incapacity matters too. If you are temporarily unable to act, the agreement can authorize a named person, or coordinate with your financial power of attorney, to keep the business operating.

What does state law say if I don’t have an operating agreement?

Maryland

Under the Maryland Limited Liability Company Act, an operating agreement generally need not be in writing unless the articles of organization require it (Md. Code, Corps. & Ass’ns § 4A-402). An LLC dissolves once it has had no members for 90 consecutive days, unless within that window the last member’s successor or assignee agrees in writing to continue the company and be admitted, or a new member is admitted as the operating agreement provides. In some cases the law automatically admits the deceased member’s personal representative unless that person declines (§ 4A-902). An agreement can make these steps clear and mandatory.

Washington, D.C.

D.C. has adopted a version of the Uniform Limited Liability Company Act, which defines an operating agreement as the members’ agreement “whether oral, in a record, implied, or in any combination,” expressly including a sole member (D.C. Code § 29-801.02). A D.C. LLC generally dissolves after 90 consecutive days with no members, unless transferees holding a majority of distribution rights consent to admit a new member and that person is admitted (D.C. Code § 29-807.01).

Texas

Texas does not require a written company agreement, and where one is silent or missing, the Business Organizations Code governs (§ 101.052). When the last remaining member’s membership ends, such as at death, the company can avoid winding up if, within one year (or a period set in the company agreement), the member’s legal representative or successor agrees to continue the company and become a member, or a new member is admitted under the agreement (Tex. Bus. Orgs. Code § 11.056).

What should a single-member LLC operating agreement include?

A good agreement is tailored to your business, but these clauses cover the core issues for most solo owners.

Can I just use a free online template?

You can, and a template is better than nothing, but many templates do not match your state’s terminology or deadlines, and few address succession in any depth. The most common gap is the one that matters most to a solo owner: a clear, enforceable plan for what happens to the business if you die or become incapacitated.

If you are still deciding between entity types, see: LLC or Corporation? Choosing the Right Structure for Your Small Business.

Frequently asked questions

Do I file my operating agreement with the state?

No. In Maryland, D.C., and Texas, the operating agreement (or company agreement) is an internal document kept with your company records. You file only the formation document, such as Articles of Organization or a Certificate of Formation.

Can I sign an operating agreement with myself?

Yes. A single-member agreement is signed by you as the sole member, and often by the company as well. D.C. law expressly recognizes an operating agreement of a sole member, and Texas makes a company agreement binding on members whether or not they sign it.

When should I update my operating agreement?

Consider updating it when you add an owner, take on significant debt, change how the LLC is taxed, move the business, or update your estate plan. Life changes that affect your will or trust often affect your LLC, too.

My LLC already exists. Is it too late?

No. You can adopt an operating agreement at any time after formation, and it can confirm how the company has been run to date.

Talk it through with us

An operating agreement is a small investment that can prevent a great deal of confusion for your family and your business later. We can help you put one in place, coordinate it with your estate plan, and do much of the work remotely. Learn more about our small business and real estate services.

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This article is general information, not legal advice. Reading it does not create an attorney-client relationship.