LLC Operating Agreement Requirements in California

At a glance

Requirements one by one

Governing law and document name

California's domestic LLC statute is the California Revised Uniform Limited Liability Company Act. Corporations Code § 17701.02(s) uses the term operating agreement for the members' agreement about the internal matters listed in § 17701.10(a). The label is not controlling: the definition applies "whether or not referred to as an operating agreement."

Required or optional

The Act does not command members to adopt an operating agreement. Instead, § 17701.10(b) supplies the consequence of silence: "To the extent the operating agreement does not otherwise provide" for an internal matter, the Act governs it. An LLC without a tailored agreement therefore still exists, but it uses the statutory fallback rules described below.

Permitted form and signatures

Section 17701.02(s) recognizes an agreement that is "oral, in a record, implied, or in any combination thereof." The LLC Act imposes no general signature, witness, acknowledgment, or notarization condition on that definition. Form still matters for particular changes: the first sentence of § 17701.10(d) lists provisions that may be varied only by a written operating agreement, and § 17701.10(e) requires a written agreement plus informed member consent to modify the fiduciary duties of the people who manage the company.

Adoption timing and effect

California sets no formation-relative deadline comparable to a 90-day adoption period. Section 17701.11(c) instead validates preformation planning: intended initial members may agree that their terms will become the operating agreement "upon the formation" of the LLC, and an intended sole member may assent to terms with the same effect. Until formation, those terms are not yet the operating agreement of an existing California LLC.

Single member and assent

A sole-member operating agreement is expressly protected from the argument that one person cannot make an enforceable agreement with itself (§ 17701.02(s)). Once the company exists, § 17701.11(a) makes the LLC bound by and able to enforce the agreement, and subsection (b) deems each later member to assent. That deemed assent has a specific limit discussed under "What trips people up."

Management and authority defaults

Section 17704.07(a) makes the LLC member-managed unless the articles of organization contain the manager-managed statement required by § 17702.01(b)(5). In a member-managed LLC, management is vested in the members; an ordinary-course difference is decided by a majority, while an act outside the ordinary course generally needs every member's consent (§ 17704.07(b)(1), (3)-(4)). In a manager-managed LLC, managers decide ordinary activity, but all members must approve a sale of substantially all property or another act outside the ordinary course (§ 17704.07(c)). Section 17703.01 adds the third-party rule: in the usual business, a member ordinarily binds a member-managed LLC, while a member acting only as a member does not bind a manager-managed LLC; the managers ordinarily have that role instead. An actual-knowledge restriction can prevent the company from being bound.

Voting, economic, and transfer defaults

When no written voting provision replaces it, § 17704.07(r) allocates votes in proportion to each member's interest in current profits. Section 17704.04(a) separately makes interim distributions follow the value of contributions stated in the required records unless the agreement provides another allocation. After formation, § 17704.01(c) lets the agreement set the admission rule; otherwise all existing members must consent. And under § 17705.02, transferring the economic interest does not by itself give the transferee a vote or a management role: the transferee receives the distributions the transferor otherwise would receive.

Nonwaivable rules and duties

The agreement can change many statutory defaults, but § 17701.10(c)-(g) sets the floor. It cannot eliminate the contractual obligation of good faith and fair dealing, eliminate the duty of loyalty, unreasonably reduce the duty of care, remove the court's specified judicial-dissolution power, or unreasonably restrict a member action. Loyalty rules may identify nonviolating categories or allow fully disclosed ratification, and liability may be limited, but not for loyalty breaches, improper financial benefits, excess distributions, intentional harm, or intentional criminal violations. The underlying duties are stated in § 17704.09: loyalty, care limited to avoiding grossly negligent or reckless conduct and specified intentional wrongdoing, and good faith and fair dealing.

Amendment, filing, and records

The default is unanimous amendment (§ 17704.07(b)(5), (r)(2)), although § 17701.10(a)(4) lets the agreement set its own amendment conditions and § 17701.12(a) can require a nonparty's approval or a specified condition. The operating agreement is not one of the items § 17702.01 requires in the public articles. If an effective filed record conflicts with the agreement, § 17701.12(d) makes the agreement control among members, managers, transferees, and dissociated members, while the filed record controls for another person to the extent that person reasonably relies on it. If the agreement is written, § 17701.13(d)(5) requires the LLC to keep it and its amendments at the designated office, and § 17704.10 supplies inspection rights.

What trips people up

• "Equal management rights" does not necessarily mean one person, one vote. Section 17704.07(b)(2) gives members equal rights to participate, but the fallback voting rule in § 17704.07(r)(1) weights votes by interests in current profits. A written agreement can choose a per-person, percentage, class, group, or other basis.
• A later member's deemed assent is not informed consent. Section 17701.11(b) ordinarily binds a person who becomes a member, but § 17701.10(e) says that deemed assent does not supply the informed consent needed to modify fiduciary duties. That protected change needs a writing and informed consent.
• An oral or implied agreement cannot make every change available to a written one. The broad form definition in § 17701.02(s) establishes that an agreement can exist; § 17701.10(d)-(e) separately reserves specified variations and fiduciary-duty modifications for a written agreement. Outside laws can also require a signed writing for a particular transaction.

Common questions

Can the agreement require approval from someone who is not a member? Yes. Section 17701.12(a) allows an amendment provision to require a nonparty's approval or the satisfaction of a condition, and makes an amendment ineffective if that requirement is not met.

Can members remove a manager without proving cause? Under the statutory default, yes. Section 17704.07(c)(5) lets a majority of the members remove a manager at any time without cause, subject to any rights the manager has under a service contract.

Does a transferee ever get access to company records? The transfer itself does not grant ordinary management or information rights (§ 17705.02(a)(3)), but § 17704.10 gives a transferee limited request and inspection rights for purposes reasonably related to the person's interest as a transferee.

Statutes and sources

• Cal. Corp. Code § 17701.02(s) — operating-agreement definition, recognized forms, and sole-member validity. https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17701.02. (accessed 2026-07-26)
• Cal. Corp. Code § 17701.10 — agreement scope, statutory gap-fillers, written-only changes, fiduciary modifications, nonwaivable rules, and liability limits. https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17701.10. (accessed 2026-07-26)
• Cal. Corp. Code § 17701.11 — LLC binding effect, later-member assent, and preformation terms. https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17701.11. (accessed 2026-07-26)
• Cal. Corp. Code § 17702.01 — articles-of-organization contents, including the public manager-managed statement. https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17702.01. (accessed 2026-07-26)
• Cal. Corp. Code § 17703.01 — member and manager agency and authority to bind the LLC in its usual business. https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17703.01. (accessed 2026-07-26)
• Cal. Corp. Code § 17704.07 — management, voting, outside-course approval, manager removal, and amendment defaults. https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17704.07. (accessed 2026-07-26)
• Cal. Corp. Code § 17704.01 — member admission after formation. https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17704.01. (accessed 2026-07-26)
• Cal. Corp. Code § 17704.04 — interim-distribution rules and contribution-value default. https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17704.04. (accessed 2026-07-26)
• Cal. Corp. Code § 17705.02 — transferable economic interest and transferee limits. https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17705.02. (accessed 2026-07-26)
• Cal. Corp. Code § 17704.09 — loyalty, care, and good-faith duties. https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17704.09. (accessed 2026-07-26)
• Cal. Corp. Code § 17701.12 — amendment conditions and filed-record conflicts. https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17701.12. (accessed 2026-07-26)
• Cal. Corp. Code § 17701.13 — designated office and retained written agreement/amendments. https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17701.13. (accessed 2026-07-26)
• Cal. Corp. Code § 17704.10 — member, manager, and transferee information and inspection rights. https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17704.10. (accessed 2026-07-26)