Oregon: LLC Operating Agreement Requirements

Requirements one by one

Form, timing, and a sole member

Oregon defines an operating agreement as a valid agreement, written or oral, of the member or members about the LLC's affairs and business. Section 63.057 calls it optional — “if any” — and imposes no general signature, witness, acknowledgment, or notarization condition.

The LLC itself begins when the Secretary of State files the articles, unless the articles state a delayed effective date. Initial membership begins on the later of that filing or the membership date in company records. Chapter 63 gives no separate agreement-adoption deadline and no express rule making a preformation agreement operate before the LLC exists.

Section 63.431 expressly gives a sole member the power to adopt, alter, amend, or repeal the agreement. For a later member, the agreement may set the admission route; if it does not, the statutory majority-consent rules apply. Oregon does not add a general deemed-assent provision for every later-admitted or unsigned person.

Management and outsider-facing authority

An Oregon LLC is member-managed unless its articles designate manager management. In the default member-managed structure, members have equal management rights and a member majority decides ordinary business matters. Manager-managed LLCs instead give equal management rights and majority decisions to the managers, subject to the member approvals listed in ORS 63.130.

The public structure also affects third parties. In a member-managed LLC, each member ordinarily acts as an agent for apparently ordinary-course business. In a manager-managed LLC, membership alone does not create agency; ordinary-course authority belongs to the manager. A private agreement cannot safely be read without the articles that establish which structure applies.

Voting, economics, admission, and transfers

Oregon's fallback approvals do not use one percentage formula. All members must consent to a default amendment or dissolution decision. A member majority controls new-member admission, interim distributions, a transfer of substantially all company property, outside-ordinary-course debt, conflict transactions, and a change in the nature of the business unless the articles or agreement replace those rules.

Profits and losses are equal by default. Interim distributions instead follow each member's right to share in profits. An assignment transfers the assigned economic rights, but the assignee does not receive voting or management rights until admitted as a member under ORS 63.245.

The agreement has statutory limits

ORS 63.155 does not permit complete elimination of loyalty or good faith and fair dealing, and it does not permit an unreasonable reduction of care. The agreement may identify non-loyalty-violating categories and set disclosed authorization standards, but those provisions cannot be unconscionable.

Section 63.160 separately bars exculpation or indemnification for loyalty breaches, bad-faith intentional misconduct or knowing violations of law, unlawful distributions, and improper personal benefits. Section 63.229 keeps the debt-payment and balance-sheet tests for distributions. A member also retains the statutory judicial-dissolution route when carrying on the business in conformity with the articles and agreement is not reasonably practicable.

Amendment, filing, and copies

Unanimity is the default amendment rule under ORS 63.130. Section 63.431 allows the articles or agreement to vest amendment power in managers, but the members retain their own statutory power to amend or repeal even then. A sole member exercises the member power alone.

The operating agreement is an internal document, not the articles filed to form the LLC. It must remain consistent with the articles. If the agreement is written, the LLC keeps the current agreement and amendments at the office selected under the agreement or, if none, at the registered office, where a member may reasonably request inspection and copying during ordinary business hours.

What trips people up

Oral does not mean every transaction may be oral. Chapter 63 recognizes an oral operating agreement, but a separate rule can still require a signed or recorded instrument for a particular promise, asset, loan, guaranty, or real-property transaction.

A private manager clause does not replace the public designation. Oregon's definition makes an LLC manager-managed when the articles say so. The agreement can regulate that structure, but the articles establish it.

Equal voting and equal economics are different defaults. Ordinary decisions are counted by members, profits and losses are equal, and distributions follow profit-sharing rights. A percentage-interest shorthand can change those rules only through valid agreement terms.

Common questions

Must an Oregon one-member LLC sign a written agreement?

No general Chapter 63 rule requires it. A sole member may adopt an agreement, and the statutory definition recognizes written or oral agreements. A separate transaction can still require a writing.

Does transferring an LLC interest make the buyer a member?

Not by itself. The assignee receives the transferred distributions and profit-and-loss allocations, but voting and management rights require admission under the agreement or ORS 63.245.

Is the operating agreement filed with the Secretary of State?

No. Oregon forms the LLC by filing articles of organization. A written operating agreement is kept with the LLC's records for member inspection.

Statutes and sources

• ORS 63.001, 63.051, 63.057, 63.130, 63.140, 63.155, 63.160, 63.185, 63.195, 63.229, 63.245, 63.249, 63.431, 63.661, 63.771, and 63.951. Current 2025 Edition of the Oregon Limited Liability Company Act. Official chapter (accessed July 28, 2026).