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Pennsylvania Single-Member LLC Operating Agreement

Create a Pennsylvania single-member LLC operating agreement with state-specific guidance on default distribution rules, annual filing, and liability protection.

Introduction

A single-member LLC operating agreement is the internal document where you, as the sole owner of a Pennsylvania LLC, set the rules for how your business runs, how profits are shared, and what happens if you bring on a partner or close the business later. Pennsylvania does not require an operating agreement to be in writing, and it can even be oral or implied. Without a written one, state default rules apply automatically, including an equal-shares profit split rather than one based on what each member contributed, and a written agreement is the clearest evidence, if a court or a creditor ever asks, that you are running a real business and not just using the LLC as a personal wallet.

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Key Things to Know

  1. 1

    Pennsylvania does not require an operating agreement to be in writing; it can be oral, implied, or in record form (15 Pa.C.S. Section 8812).

  2. 2

    Without an operating agreement, Pennsylvania law splits pre-dissolution distributions in equal shares among members, not in proportion to what each member contributed (15 Pa.C.S. Section 8844).

  3. 3

    A charging order is the exclusive statutory remedy against a member's LLC interest, and Pennsylvania law specifically addresses foreclosure against a sole member: the buyer at a foreclosure sale gets the member's entire interest, not just its economic portion, and the original member is dissociated (15 Pa.C.S. Section 8853).

  4. 4

    Pennsylvania LLCs owe no annual franchise tax, that tax was repealed for tax years starting in 2016, but a new $7 annual report is required each year between January 1 and September 30, starting with the 2025 report year (PA Department of State).

  5. 5

    The duty of loyalty and duty of care can be narrowed, but not eliminated, under a 'not manifestly unreasonable' standard, and the implied duty of good faith and fair dealing can never be eliminated (15 Pa.C.S. Section 8815).

  6. 6

    An LLC is member-managed by default unless the operating agreement itself elects manager-management; this election is made in the operating agreement, not in the public filing with the state (15 Pa.C.S. Section 8847).

  7. 7

    The operating agreement is not filed with the state. You form the LLC by filing a Certificate of Organization ($125 fee) with the Pennsylvania Department of State.

Key decisions before you file

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

Open the LLC Operating Agreement guide

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Pennsylvania-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 Pennsylvania law.

1. Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania, including the Pennsylvania Uniform Limited Liability Company Act of 2016, 15 Pa.C.S. Chapter 88.

2. Allocation of Distributions

Unless otherwise stated elsewhere in this Agreement, any distribution made by the Company before its dissolution and winding up shall be in equal shares among the Members, as provided by 15 Pa.C.S. Section 8844 in the absence of a contrary agreement.

3. Fiduciary Duties

The duty of loyalty and the duty of care owed by a Member or Manager to the Company and to the other Members may be altered by this Agreement, but not eliminated, provided the alteration is not manifestly unreasonable. The implied contractual obligation of good faith and fair dealing may not be eliminated, though this Agreement may prescribe the standards, if not manifestly unreasonable, by which it is measured, as provided by 15 Pa.C.S. Section 8815(d) and Section 8849.1.

4. Indemnification

The Company may indemnify a Member or Manager as set forth in the complete template, except that indemnification, and exoneration from monetary liability for a breach of the duty of care, is not available for an act determined by a court to constitute recklessness, willful misconduct, or a knowing violation of law, as provided by 15 Pa.C.S. Section 8848(g) and Section 8849.1(j).

5. Charging Order Against Sole Member

The Members acknowledge that, under 15 Pa.C.S. Section 8853, a charging order is the exclusive remedy by which a judgment creditor of a Member may satisfy a judgment from that Member's interest in the Company, and that, in a single-member Company, foreclosure of a charging order lien against the sole Member's interest transfers the Member's entire interest, not only its economic portion, to the purchaser at the foreclosure sale.

6. Execution

This Agreement is effective as of the date signed below. Pennsylvania law does not require an LLC operating agreement to be notarized or witnessed to be valid. The provisions above are effective only because they are set forth in this signed Agreement.

[MEMBER] Signature: _____________________ Date: _____________

Printed Name: _____________________

Pennsylvania Requirements for LLC Operating Agreement

Formation and Governing Law (15 Pa.C.S. §§ 8811-8898)

The LLC is formed under and governed by the Pennsylvania Uniform Limited Liability Company Act of 2016 (15 Pa.C.S. Chapter 88), which took effect February 21, 2017 and has governed all Pennsylvania LLCs, regardless of formation date, since April 1, 2017. This Act replaced the prior Limited Liability Company Law of 1994.

Limited Liability Protection (15 Pa.C.S. § 8834)

Affirms that members and managers are not personally liable, directly or indirectly, for a debt, obligation, or other liability of the LLC solely by reason of being or acting as a member or manager. This protection applies regardless of whether the company has a single member or multiple members, and regardless of the company's dissolution, winding up, or termination (15 Pa.C.S. Section 8834(a)).

Certificate of Organization Requirements (15 Pa.C.S. § 8821)

The Certificate of Organization must state the LLC's name and its registered office address. Unlike some states, Pennsylvania's certificate does not require a management-structure election; that choice is made in the Operating Agreement itself, not in the public filing (15 Pa.C.S. Section 8821).

Registered Office Requirement (15 Pa.C.S. § 8825)

Pennsylvania law requires LLCs to maintain a registered office in the Commonwealth. The Operating Agreement should specify this office location.

Member-Managed vs. Manager-Managed Structure (15 Pa.C.S. § 8847)

A Pennsylvania LLC is member-managed by default unless the Operating Agreement itself expressly elects manager-management. This election is made in the Operating Agreement, not the Certificate of Organization. In a member-managed LLC, each member has equal management rights (15 Pa.C.S. Section 8847).

Voting Rights and Procedures (15 Pa.C.S. § 8847)

In a member-managed LLC, ordinary-course business decisions are decided by a majority of the members. Matters outside the ordinary course, and any amendment to the Certificate of Organization or Operating Agreement, require the unanimous consent of all members (15 Pa.C.S. Section 8847).

Allocation of Profits, Losses, and Distributions (15 Pa.C.S. § 8844)

Absent a contrary agreement, Pennsylvania law splits any distribution made before dissolution in equal shares among members, regardless of each member's capital contribution. The Operating Agreement can set a different split (15 Pa.C.S. Section 8844).

Fiduciary Duties (15 Pa.C.S. § 8849.1)

Defines the fiduciary duties owed to the LLC and its members: by members in a member-managed LLC, or by managers in a manager-managed LLC. The duty of loyalty and duty of care can be altered, but not eliminated, if the alteration is not manifestly unreasonable. The implied duty of good faith and fair dealing can never be eliminated (15 Pa.C.S. Section 8815(d), Section 8849.1).

Indemnification Provisions (15 Pa.C.S. § 8849.2)

The Operating Agreement may broaden or narrow indemnification, but indemnification, and exoneration from monetary liability for a breach of the duty of care, is not available for an act a court determines to be recklessness, willful misconduct, or a knowing violation of law (15 Pa.C.S. Sections 8848(g) and 8849.1(j), not Section 8849.2, which addresses managers' standards of conduct rather than indemnification directly).

Books and Records (15 Pa.C.S. § 8850)

Members' statutory rights to company information cannot be eliminated by the Operating Agreement, only reasonably restricted, with remedies such as liquidated damages defined for misuse of that information (15 Pa.C.S. Sections 8815(c)(14), 8815(d)(1)(iii), and 8850).

Amendment Procedures (15 Pa.C.S. § 8815)

If a written Operating Agreement states that it can only be amended in writing, an oral amendment to it is not enforceable, even though Pennsylvania otherwise allows operating agreements to be oral or implied (15 Pa.C.S. Sections 8815(a)(4) and 8817).

Single-Member LLC Provisions (15 Pa.C.S. § 8812)

Pennsylvania's charging-order statute directly addresses the single-member case: if a court forecloses a charging order lien against a sole member's interest, the buyer at the foreclosure sale acquires the member's entire interest, not just its economic portion, becomes a member, and the original sole member is dissociated (15 Pa.C.S. Section 8853(f)). Liability protection itself still applies the same way regardless of single- or multi-member status (Section 8834(a)).

Frequently Asked Questions

It's the internal document where a Pennsylvania LLC's sole owner sets the rules for running the business and sharing profits. Pennsylvania doesn't require it to be written, allowing oral or implied agreements, but a written one is the clearest proof the LLC is a real business, not just a personal wallet.

Not by blanket legal requirement. Pennsylvania allows oral, implied, or written operating agreements (15 Pa.C.S. Section 8812). But without a written one, state defaults apply automatically, including an equal-shares distribution split rather than one you choose, which matters most once you bring on a second member.

Pennsylvania's default LLC rules fill the gap. Distributions made before dissolution are split in equal shares among members, regardless of how much each member contributed, unless the operating agreement says otherwise. That default matters most once you bring on a partner and haven't defined your own split (15 Pa.C.S. Section 8844).

It supports that protection but doesn't guarantee it alone. Pennsylvania law makes a charging order the exclusive creditor remedy against a member's interest, and for a sole member, a foreclosed charging order can transfer the member's entire interest to the buyer, not just its economic share (15 Pa.C.S. Section 8853).

Pennsylvania LLCs owe no annual franchise tax, that tax was repealed for tax years starting in 2016. Instead, a new annual report is due each year between January 1 and September 30, with a $7 filing fee, a requirement that began with the 2025 report year.

No. You file a Certificate of Organization ($125 fee) with the Pennsylvania Department of State to form the LLC, but the operating agreement itself is an internal document. You keep it with your own business records; it's never submitted to the state.

Partially. The duty of loyalty and duty of care can be altered but not eliminated, under a standard that the alteration not be manifestly unreasonable. The implied duty of good faith and fair dealing can never be eliminated, though the agreement can set standards for measuring it (15 Pa.C.S. Section 8815).