Single-Member LLC Operating Agreement — Arkansas

Single-Member LLC Operating Agreement (Arkansas)

Quick-Reference Summary

Parties and Effective Date

This Single-Member Limited Liability Company Operating Agreement (this "Agreement") is entered into and effective as of [__/__/____] (the "Effective Date") by [________________________________] (the "Member"), the sole member of [________________________________], an Arkansas limited liability company (the "Company").

Article I — Formation

1.1 Formation

The Company was formed as an Arkansas limited liability company by the filing of a Certificate of Organization with the Arkansas Secretary of State pursuant to Ark. Code § 4-38-201 on [__/__/____]. The Company became formed upon the latest of (a) acceptance of the Certificate of Organization by the Secretary of State and (b) the admission of at least one person as a member, in accordance with § 4-38-201(d).

1.2 Name

The name of the Company is [________________________________], which complies with the naming requirements of Ark. Code § 4-38-112.

1.3 Principal Office

The Company's principal office is [________________________________].

1.4 Registered Agent

The Company's registered agent in Arkansas is [________________________________], located at [________________________________], in accordance with Ark. Code § 4-38-115.

1.5 Term

The Company shall have perpetual duration unless dissolved in accordance with this Agreement or Ark. Code § 4-38-701.

1.6 Governing Law

This Agreement and the internal affairs of the Company are governed by the laws of the State of Arkansas, including the Arkansas Uniform Limited Liability Company Act, Ark. Code §§ 4-38-101 et seq.

Article II — Purpose and Powers

2.1 Purpose

The Company is organized to engage in any lawful purpose or activity for which a limited liability company may be organized under Ark. Code § 4-38-108, including: [________________________________].

2.2 Powers

The Company has all powers granted to a limited liability company under Ark. Code § 4-38-109, including the power to acquire, hold, and convey property, to contract, to sue and be sued, and to engage in any lawful activity.

Article III — Member (Sole Member)

3.1 Identification of Sole Member

3.2 Sole Member Status

The Member is the sole member of the Company and owns 100% of the membership interests. By default, the Company is a disregarded entity for federal income tax purposes under Treas. Reg. § 301.7701-3 unless the Member elects otherwise.

3.3 No Personal Liability

A debt, obligation, or other liability of the Company is solely the debt, obligation, or liability of the Company, and the Member is not personally liable, directly or indirectly, for any such debt by reason of being a member, in accordance with Ark. Code § 4-38-304.

3.4 Separateness Formalities

The Member shall maintain Company books and records, segregate Company funds from personal funds, and observe other formalities necessary to preserve the limited-liability shield under Arkansas law.

Article IV — Management

4.1 Member-Managed (Default Under Act 1041 of 2021)

The Company is member-managed within the meaning of Ark. Code § 4-38-407. Under the Arkansas ULLCA, the management designation is set forth in this Agreement (not in the Certificate of Organization). If silent, member-managed is the statutory default.

4.2 Manager-Managed Election (Optional)

☐ The Company is instead designated manager-managed, and the initial Manager is [________________________________].

4.3 Authority of the Member

The Member has full authority to make all decisions on behalf of the Company, to execute contracts, and otherwise to bind the Company. Authority of third parties to rely on the Member's signature may also be evidenced by a Statement of Authority filed under Ark. Code § 4-38-302.

4.4 Standards of Conduct

The Member shall act in good faith. The duties of loyalty and care under Ark. Code § 4-38-409 apply. Section 4-38-105(e) bars wholesale elimination of those duties, while § 4-38-105(f) permits specified changes if its conditions are met: certain aspects of loyalty may be altered or eliminated if not manifestly unreasonable, and the duty of care may be altered without authorizing bad faith, willful or intentional misconduct, or knowing violation of law. This Agreement does not eliminate the contractual obligation of good faith and fair dealing.

Article V — Capital Accounts and Distributions

5.1 Capital Contributions

The Member's initial capital contribution is set forth in Article III, § 3.1. Additional contributions are within the Member's sole discretion.

5.2 Capital Account

A capital account shall be maintained in accordance with Treas. Reg. § 1.704-1(b)(2)(iv).

5.3 Allocations

All items of income, gain, loss, deduction, and credit are allocated 100% to the Member.

5.4 Distributions

Distributions shall be made at such times and amounts as the Member determines, subject to the solvency limitations of Ark. Code § 4-38-405.

5.5 Taxes

The Member is responsible for all federal and Arkansas state income tax obligations arising from Company operations, including pass-through income subject to Arkansas individual income tax.

Article VI — Transfer of Interest / Charging Order

6.1 Transfer of Interest

The Member's interest is transferable subject to Ark. Code § 4-38-502. A transfer by itself does not entitle the transferee to participate in management or to become a member.

6.2 Admission of New Members

A transferee may become a member only with the written consent of the Member (or all members then in existence) and execution of a written joinder, in accordance with Ark. Code § 4-38-401.

6.3 Charging Order — Ark. Code § 4-38-503

A judgment creditor of the Member may apply to a court of competent jurisdiction for a charging order against the Member's membership interest. The order constitutes a lien on that interest, and the creditor has only the right to receive distributions to which the Member would otherwise be entitled. Ark. Code § 4-38-503(a), (b), (c)(1).

6.4 Effect of Charging Order

Under Ark. Code § 4-38-503(b), a creditor holding a charging order has only the right to receive a distribution to which the judgment debtor would otherwise be entitled in respect of the membership interest.

6.5 No Foreclosure of Charging Order Lien (Act 461 of 2025)

Under Ark. Code § 4-38-503(c)(2), the charging order lien may not be foreclosed under the LLC Act or any other law. Section 4-38-503(h) expressly applies the provision to a single-member LLC. This does not invalidate a separate consensual security interest or assignment described in § 4-38-503(d).

6.6 Satisfaction of Judgment

The Member or Company may satisfy a judgment that is subject to a charging order. The former § 4-38-503(b) foreclosure and substitution procedure was removed by Act 461 of 2025.

Article VII — Dissolution

7.1 Events of Dissolution

The Company shall be dissolved and its affairs wound up upon the first to occur of the events specified in Ark. Code § 4-38-701, including:

• A written determination by the Member to dissolve;
• An event specified in this Agreement;
• The passage of 90 consecutive days during which the Company has no members;
• Entry of a judicial decree of dissolution under § 4-38-701(a)(4); or
• Administrative dissolution under § 4-38-708.

7.2 Winding Up

Upon dissolution, the Company shall wind up its affairs and apply assets to discharge obligations, with any remainder distributed to the Member, in accordance with Ark. Code §§ 4-38-702 through 4-38-708.

7.3 Statement of Termination

After winding up, a Statement of Termination shall be filed with the Arkansas Secretary of State.

Article VIII — State-Specific Provisions

8.1 Arkansas Annual Franchise Tax

The Company shall pay the Arkansas annual LLC franchise tax (currently $150 minimum, verify on the Arkansas Secretary of State website) by the statutory deadline of May 1 of each year, as required by Ark. Code § 26-54-104.

8.2 No Mandatory Written Operating Agreement

Under the definition of "operating agreement" in Ark. Code § 4-38-102(13), an operating agreement in Arkansas may be oral, implied, in a record, or any combination thereof. The Member nonetheless has executed this written Agreement to (a) preserve the limited-liability shield, (b) evidence Company governance, and (c) satisfy bank, lender, and insurance documentation requirements.

8.3 Statement of Authority (Optional)

The Company may, in the Member's discretion, file a Statement of Authority under Ark. Code § 4-38-302 to give public notice of the persons authorized to bind the Company in transactions affecting real property or otherwise.

8.4 Series LLC Structure (Optional)

Arkansas authorizes protected series limited liability companies under the Arkansas Uniform Protected Series Act, Ark. Code § 4-37-101 et seq. (a chapter separate from, but operating alongside, the Uniform Limited Liability Company Act). A protected series is established only upon the Member's consent and the filing of a protected series designation with the Arkansas Secretary of State under Ark. Code § 4-37-201, and each protected series' name must include "protected series" or "PS." Absent such a designation, no protected series exists.

☐ The Company does not elect to establish a protected series as of the Effective Date.
☐ The Company establishes the following protected series: [________________________________].

8.5 Pre-September 1, 2021 LLCs

If the Company was formed before September 1, 2021, the Member acknowledges that (a) the prior Small Business Entity Tax Pass-Through Act was repealed and (b) the management designation in the pre-2021 Articles of Organization continues to control unless this Agreement clearly supersedes it; see Arkansas's New LLC Act: Practical Steps for Lenders, Quattlebaum, Grooms & Tull (2022).

8.6 Non-Waivable Provisions

This Agreement may not vary any provision of the ULLCA listed as non-waivable under Ark. Code § 4-38-105(e), including provisions pertaining to Secretary of State filings, the rights of third parties preserved under § 4-38-106 and § 4-38-107(b), and the elimination of the implied contractual covenant of good faith and fair dealing.

Article IX — General Provisions

9.1 Amendment

This Agreement may be amended only by a writing signed by the Member.

9.2 Severability

If any provision of this Agreement is held invalid or unenforceable, the remaining provisions continue in full force.

9.3 Entire Agreement

This Agreement, together with the Certificate of Organization and any amendments, is the entire agreement of the Member concerning the Company.

9.4 Indemnification

The Company shall indemnify the Member and any officer or Manager to the fullest extent permitted by Ark. Code § 4-38-408.

9.5 Successor on Member's Death (Optional)

On the Member's death, the Member's entire membership interest shall pass to: [________________________________] (the "Designated Successor"), who shall be admitted as a member without further consent, consistent with Ark. Code § 4-38-401.

9.6 Notices

All notices shall be in writing and sent to the Member's address in Article III, § 3.1.

9.7 Counterparts; Electronic Signature

This Agreement may be executed in counterparts and by electronic signature.

Signature Block

THE COMPANY:

[________________________________], an Arkansas limited liability company

By: ____________________________________________________

Name: [________________________________]

Title: Sole Member

Date: [__/__/____]

THE SOLE MEMBER:

____________________________________________________

[________________________________]

Date: [__/__/____]

Pre-Execution Checklist

☐ LLC name distinguishable on Arkansas SOS records (§ 4-38-112)
☐ Certificate of Organization filed and accepted by AR Secretary of State (§ 4-38-201)
☐ At least one person (the Member) actually admitted — required for formation under § 4-38-201(d)
☐ Registered agent confirmed in writing (§ 4-38-115)
☐ EIN obtained from the IRS
☐ Initial capital contribution actually transferred to a Company bank account
☐ Separate Company bank account opened
☐ Annual franchise tax calendar reminder set (due May 1, Ark. Code § 26-54-104)
☐ Operating Agreement signed and stored with Company records
☐ Statement of Authority filed if real-estate or banking authority needs to be publicly evidenced (§ 4-38-302)
☐ S-Corp election (Form 2553) evaluated
☐ Federal Beneficial Ownership Information (BOI) reporting evaluated under applicable federal law
☐ Pre-2021 management designation in any pre-existing Articles confirmed and reconciled with Article IV (§ 8.5)
☐ Successor on death designation completed if desired (Article IX, § 9.5)

Sources and References

• Arkansas Uniform Limited Liability Company Act, Ark. Code §§ 4-38-101 et seq.: https://codes.findlaw.com/ar/title-4-business-and-commercial-law/#!tab=overview
• Ark. Code § 4-38-503 (Charging Order, as amended by Act 461 of 2025): https://webftp.blr.arkansas.gov/Home/FTPDocument?path=ACTS%2F2025R%2FPublic%2FSearchable%2FACT461.pdf
• Act 1041 of 2021 (SB601) — original adoption of ULLCA: https://arkleg.state.ar.us
• Arkansas Uniform Protected Series Act, Ark. Code § 4-37-101 et seq. (series LLCs; Act 665 of 2019, as amended by Act 1041 of 2021): https://law.justia.com/codes/arkansas/title-4/subtitle-3/chapter-37/
• Carol Goforth, Heads Up! Arkansas Has a New LLC Act, Arkansas Law Notes (2021): https://law.uark.edu/alr/lawnotes/articles/goforth-ark-llc.pdf
• Ark. Code § 4-38-212 (Annual report for Secretary of State): https://law.justia.com/codes/arkansas/title-4/subtitle-3/chapter-38/subchapter-2/section-4-38-212/
• Arkansas Secretary of State — Business Filings: https://www.sos.arkansas.gov/business-commercial-services-bcs
• Ark. Code § 26-54-104 (Annual franchise tax, Arkansas Corporate Franchise Tax Act of 1979): https://law.justia.com/codes/arkansas/title-26/subtitle-5/chapter-54/section-26-54-104/
• IRS Form 8832: https://www.irs.gov/forms-pubs/about-form-8832
• IRS Form 2553: https://www.irs.gov/forms-pubs/about-form-2553