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Ohio Single-Member LLC Operating Agreement

Create an Ohio single-member LLC operating agreement with state-specific guidance on the Revised LLC Act, default rules, and asset protection.

Introduction

A single-member LLC operating agreement is the internal document where you, as the sole owner of an Ohio LLC, set the rules for how your business runs and what happens if you bring on a partner or close the business later. Ohio's Revised Limited Liability Company Act (Ohio Revised Code Chapter 1706, effective 2022) treats this document differently for a one-owner company: the statute defines a sole member's operating agreement as a written declaration, not an optional formality you can leave unwritten. Putting your rules in writing is also the clearest evidence, if a court or the IRS ever asks, that you are running a real business rather than using the LLC as a personal wallet.

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Key Things to Know

  1. 1

    Ohio law defines a single-member LLC's operating agreement as a written declaration of the sole member, not an oral or implied agreement, unlike the rule for multi-member LLCs (Ohio Rev. Code Section 1706.01(R)).

  2. 2

    Without an operating agreement, Ohio law splits distributions equally among members rather than in proportion to each member's capital contribution (Ohio Rev. Code Section 1706.29).

  3. 3

    A charging order is the sole and exclusive remedy against a member's LLC interest in Ohio, and the statute extends this protection to single-member LLCs by its plain text, closing a gap Florida's Olmstead ruling once exposed (Ohio Rev. Code Section 1706.342).

  4. 4

    Ohio LLCs owe no annual report and no franchise tax. The only ongoing state tax most LLCs could face is the Commercial Activity Tax, which applies only above $6 million in annual Ohio gross receipts.

  5. 5

    A written operating agreement can expand, narrow, or eliminate a member's or manager's fiduciary duties entirely, but it can never eliminate the implied covenant of good faith and fair dealing (Ohio Rev. Code Section 1706.08).

  6. 6

    The operating agreement itself is not filed with the state. You form the LLC by filing Articles of Organization with the Ohio Secretary of State for a $99 fee.

  7. 7

    Ohio's entire LLC statute changed in 2022: the Ohio Revised Limited Liability Company Act (Chapter 1706) replaced the old Chapter 1705 for every Ohio LLC, regardless of when it was formed, so older guidance citing Chapter 1705 is out of date.

Key decisions before you file

Before you file a LLC Operating Agreement in Ohio, a few decisions shape the document: which option to choose and what each one means. The LLC Operating Agreement guide walks through them.

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Ohio-Specific Provisions

Use this together with the complete LLC operating agreement template, which covers the standard provisions your agreement also needs: capital contributions, management structure, meetings, transfers, withdrawal, and dissolution. The sections below cover only what is specific to Ohio law.

1. Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the State of Ohio, including the Ohio Revised Limited Liability Company Act, Ohio Revised Code Chapter 1706.

2. Written Declaration of the Sole Member

The undersigned is the sole member of the Company. Under Ohio Revised Code Section 1706.01(R), the operating agreement of a limited liability company with only one member is defined by statute as a written declaration of that sole member, and this Agreement constitutes that written declaration. This Agreement is not unenforceable merely because there is only one party to it.

3. Allocation of Distributions

Unless otherwise stated elsewhere in this Agreement, distributions shall be shared equally among the Members, as provided by Ohio Revised Code Section 1706.29 in the absence of a contrary agreement.

4. Fiduciary Duties

The duty of loyalty and the duty of care that a Member or Manager would otherwise owe to the Company and to the other Members under Ohio Revised Code Sections 1706.31 and 1706.311 may be expanded, restricted, or eliminated by this Agreement. Notwithstanding the foregoing, this Agreement does not eliminate the implied covenant of good faith and fair dealing, and does not limit or eliminate liability for any act or omission that constitutes a bad faith violation of that covenant, as required by Ohio Revised Code Section 1706.08.

5. Indemnification

The Company may indemnify, advance expenses to, and maintain insurance on behalf of a Member, Manager, or other person, as set forth in the complete template and as authorized by Ohio Revised Code Section 1706.32.

6. Execution

This Agreement is effective as of the date signed below. Ohio law does not require an LLC operating agreement or sole-member declaration to be notarized or witnessed to be valid, but it must be in writing to satisfy Ohio Revised Code Section 1706.01(R)'s definition for a single-member LLC. This Agreement is not filed with the Ohio Secretary of State; only the Company's Articles of Organization are a public filing.

[MEMBER] Signature: _____________________ Date: _____________

Printed Name: _____________________

Ohio Requirements for LLC Operating Agreement

Formation and Governing Law (Ohio Revised Code Chapter 1706)

The LLC is formed under and governed by the Ohio Revised Limited Liability Company Act, Ohio Revised Code Chapter 1706, effective February 11, 2022, which replaced the former Chapter 1705 for every Ohio LLC regardless of when it was formed. Ohio law does not require the Operating Agreement itself to recite compliance with the Act.

Member-Managed vs. Manager-Managed Structure (Ohio Revised Code Section 1706.30)

An Ohio LLC is member-managed by default: its activities and affairs are under the direction and oversight of its members unless the Operating Agreement designates managers. In a member-managed LLC, ordinary-course matters are decided by a majority of the members, while amending the Operating Agreement or acting outside the ordinary course requires unanimous consent (Ohio Rev. Code Section 1706.30).

Allocation of Profits, Losses, and Distributions (Ohio Revised Code Section 1706.29)

Absent a contrary Operating Agreement provision, Ohio law splits distributions equally among members, regardless of each member's capital contribution or ownership percentage. The Operating Agreement can set a different split (Ohio Rev. Code Section 1706.29).

Voting Rights and Decision-Making (Ohio Revised Code Section 1706.30)

In a member-managed Ohio LLC, a matter in the ordinary course of the LLC's activities may be decided by a majority of the members. An act outside the ordinary course, including amending the Operating Agreement, requires the consent of all members (Ohio Rev. Code Section 1706.30).

Fiduciary Duties (Ohio Revised Code Section 1706.08)

Members and managers owe the LLC and each other a duty of loyalty and a duty of care. Unlike many states, Ohio permits a written Operating Agreement to expand, restrict, or eliminate these duties entirely; the one fixed limit is that the Operating Agreement can never eliminate the implied covenant of good faith and fair dealing, or liability for a bad-faith violation of it (Ohio Rev. Code Section 1706.08).

Indemnification and Liability Limitations (Ohio Revised Code Section 1706.32)

Ohio law broadly authorizes the LLC to indemnify a member, manager, or other person, advance or reimburse their expenses, and maintain insurance on their behalf (Ohio Rev. Code Section 1706.32). The statute does not enumerate specific exceptions to indemnification the way some states do, so the Operating Agreement itself should define any limits the members want to impose.

Frequently Asked Questions

It's the internal document where an Ohio LLC's sole owner sets the rules for running the business and handling distributions. Ohio law defines this document, for a one-member LLC specifically, as a written declaration of the sole member, not an optional or oral arrangement, and it's the clearest proof the LLC is a real business, not just a personal wallet.

Yes, in a specific sense. Ohio Revised Code Section 1706.01(R) defines a single-member LLC's operating agreement as a written declaration of the sole member, not an oral or implied one. Without a written declaration, Ohio's default rules, including equal-share distributions, fill every gap you haven't addressed yourself.

Ohio's default LLC rules fill the gap. Distributions get split equally among members rather than however you'd choose to divide them, which matters most once you bring on a second member without updating your agreement (Ohio Rev. Code Section 1706.29 sets this equal-share default absent a contrary agreement).

It supports that protection. Ohio law makes a charging order the sole and exclusive remedy against your LLC interest, and unlike some states, Ohio's statute extends that protection to single-member LLCs by its own text. Keeping the LLC's finances and formalities genuinely separate from your own is still what keeps that shield intact.

Ohio LLCs owe no annual report and no franchise tax, unlike most states. The main ongoing state tax, the Commercial Activity Tax, only applies once a business has more than $6 million in annual Ohio gross receipts, a threshold most single-member LLCs never come close to reaching.

No. You file Articles of Organization with the Ohio Secretary of State for a $99 fee to form the LLC, but the operating agreement, even as the required written declaration for a single-member LLC, is never submitted to the state. You keep it with your own business records.

Largely yes. A written operating agreement can expand, narrow, or eliminate the duty of loyalty and duty of care that a member or manager would otherwise owe. The one thing it can never eliminate is the implied covenant of good faith and fair dealing, under Ohio Revised Code Section 1706.08.