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Texas Single-Member LLC Operating Agreement

Create a Texas single-member LLC operating agreement with state-specific guidance on Business Organizations Code defaults, franchise tax, and liability protection.

Introduction

A single-member LLC operating agreement, called a company agreement under Texas law, is the internal document where you, as the sole owner of a Texas LLC, set the rules for how your business runs, how profits are handled, and what happens if you bring on a partner or close the business later. Texas does not require a company agreement to be written, and an oral company agreement is enforceable even for a single-member LLC. A written agreement is still the clearest evidence that you are running a real business if a court or creditor ever asks, and it is what lets you set your own rules for fiduciary duties and profit splits instead of falling back on Texas's default rules.

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Key Things to Know

  1. 1

    Texas does not require a company agreement (Texas's term for an operating agreement) to be written; an oral or implied agreement is enforceable, even for a single-member LLC (Business Organizations Code Section 101.001).

  2. 2

    Without a company agreement, Texas law allocates profits and losses based on the agreed value of each member's capital contribution, not split evenly (BOC Section 101.201).

  3. 3

    A charging order is the exclusive remedy against a member's LLC interest, and a 2023 law (S.B. 2314) confirmed this protection applies to single-member LLCs, not just multi-member ones (BOC Section 101.112).

  4. 4

    The liability shield can still be pierced, but only on a showing of actual fraud perpetrated primarily for the member's direct personal benefit, a higher bar than ordinary alter-ego facts (BOC Sections 101.002, 21.223).

  5. 5

    Texas has no flat annual LLC fee. Franchise tax applies only above a revenue threshold ($2,650,000 for 2026-2027), but every LLC must still file a Public or Ownership Information Report by May 15 each year regardless of tax owed.

  6. 6

    As of a May 2025 amendment (S.B. 29), a Texas company agreement may expand, restrict, or fully eliminate fiduciary duties, including the duty of loyalty, if it affirmatively says so (BOC Section 101.401).

  7. 7

    The company agreement itself is not filed with the state. You form the LLC by filing a Certificate of Formation (Form 205, $300 fee) with the Texas Secretary of State.

Key decisions before you file

Before you file a LLC Operating Agreement in Texas, 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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Texas-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 Texas law.

1. Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the State of Texas, including the Texas Business Organizations Code, Title 3, Chapter 101 (the Texas Limited Liability Company Law), and constitutes the "company agreement" of the Company for purposes of that chapter.

2. Allocation of Profits and Losses

Unless otherwise stated elsewhere in this Agreement, profits and losses shall be allocated to each Member on the basis of the agreed value of that Member's contributions to the Company, as stated in the Company's required records, as provided by Texas Business Organizations Code Section 101.201 in the absence of a contrary agreement.

3. Fiduciary Duties

The duties, including fiduciary duties, that a Member, Manager, or officer owes to the Company or to another Member or Manager may be expanded, restricted, or eliminated by this Agreement, as provided by Texas Business Organizations Code Section 101.401. No duty is modified or eliminated except to the extent expressly stated in this written Agreement.

4. Indemnification

The Company may indemnify, advance expenses to, and purchase or maintain insurance for a Member, Manager, or officer as set forth in the complete template and as permitted by Texas Business Organizations Code Section 101.402. This Section does not itself create a right to indemnification; it is permissive only, and any indemnification right must be separately stated in this Agreement to apply.

5. Execution

This Agreement is effective as of the date signed below. Texas law does not require an LLC company agreement to be notarized or witnessed to be valid, and it need not even be in writing to be enforceable, though the provisions of Section 3 and Section 4 above apply only because they are set forth in this written, signed Agreement.

[MEMBER] Signature: _____________________ Date: _____________

Printed Name: _____________________

Texas Requirements for LLC Operating Agreement

Formation and Governing Law (Texas Business Organizations Code § 101.052)

This Agreement is governed by the Texas Business Organizations Code, Title 3, Chapter 101. Under BOC Section 101.052, the company agreement governs the relations among members, managers, and officers and the other internal affairs of the LLC; to the extent the agreement is silent, the Business Organizations Code and Title 1 fill the gap.

Limited Liability Protection (Texas Business Organizations Code § 101.114)

Members and managers are not personally liable for a debt, obligation, or liability of the LLC, except and to the extent the company agreement specifically provides otherwise (BOC Section 101.114). This shield can still be pierced, but only on a showing that a member used the LLC to perpetrate actual fraud primarily for the member's own direct personal benefit (BOC Sections 101.002, 21.223), not on ordinary alter-ego or commingling facts alone.

Management Structure (Texas Business Organizations Code § 101.251)

A Texas LLC's governing authority consists of its managers only if the certificate of formation states the company will have one or more managers; otherwise the governing authority consists of the members, and the LLC is member-managed by default (BOC Section 101.251). This designation is made on the certificate of formation itself, not the company agreement.

Allocation of Profits, Losses, and Distributions (Texas Business Organizations Code § 101.201-101.205)

Absent a contrary company agreement, Texas law allocates profits and losses to each member based on the agreed value of that member's capital contributions, not split evenly and not based on ownership percentage as such (BOC Section 101.201). The company agreement can set a different split.

Voting Rights and Decision-Making (Texas Business Organizations Code § 101.354)

By default, each member has an equal vote regardless of capital contribution or ownership percentage (BOC Section 101.354, "Equal Voting Rights"). Actions outside the ordinary course generally require majority approval of the governing persons; fundamental business transactions and certificate-of-formation amendments require approval by all members (BOC Section 101.356).

Fiduciary Duties (Texas Business Organizations Code § 101.401-101.402)

A Texas company agreement may expand, restrict, or, as of a May 2025 statutory amendment (S.B. 29), fully eliminate the fiduciary duties, including the duty of loyalty, that a member, manager, or officer owes to the LLC or another member (BOC Section 101.401). This must be done affirmatively in the company agreement; it does not happen automatically.

Withdrawal and Dissociation of Members (Texas Business Organizations Code § 101.107)

By default, a Texas LLC member may not withdraw or be expelled from the company at all (BOC Section 101.107), a stricter default than many states' at-will withdrawal rules. This default can be waived or modified in the company agreement, since Section 101.107 does not appear on the Business Organizations Code's list of non-waivable provisions (BOC Section 101.054).

Books, Records, and Accounting (Texas Business Organizations Code § 101.501-101.502)

Texas LLCs must keep specific supplemental records at their principal office, including a current ownership list, six years of tax returns, the certificate of formation, and the written company agreement if one exists (BOC Section 101.501). Members may inspect these on written request for a proper purpose, and are entitled to a free copy of the certificate of formation, the written company agreement, and tax returns on request (BOC Section 101.502).

Indemnification and Insurance (Texas Business Organizations Code § 8.101-8.105)

Texas law permits, but does not require, an LLC to indemnify, advance expenses to, and insure its members, managers, and officers (BOC Section 101.402). Any indemnification right must be set out affirmatively in the company agreement to apply; Texas law does not grant it automatically.

Amendment Procedures (Texas Business Organizations Code § 101.052-101.054)

A Texas LLC's company agreement may be amended only if every member of the company consents to the amendment (BOC Section 101.053). Unlike some other company actions, Texas law does not default to a lesser majority-vote threshold for amending the company agreement itself.

Series LLC Provisions (Texas Business Organizations Code § 101.601-101.622)

If establishing a series LLC, the company agreement must establish one or more designated series of members, managers, membership interests, or assets, each of which can be segregated from the liabilities of the LLC generally and of other series, provided the statutory record-keeping and notice conditions are met (BOC Section 101.601 et seq.).

Frequently Asked Questions

It's the internal document, called a company agreement under Texas law, where a Texas LLC's sole owner sets the rules for running the business and handling profits. Texas doesn't require it to be written, even for a single-member LLC, but a written company agreement is the clearest proof the LLC is a real business, not just a personal wallet.

Not by blanket legal requirement. Texas Business Organizations Code Section 101.001 allows an oral or implied company agreement, and confirms a single-member company agreement isn't unenforceable just because one person signed it. Without a written one, though, Texas's default rules fill every gap you haven't addressed yourself.

Texas's default LLC rules fill the gap. Profits and losses get allocated based on the agreed value of each member's capital contribution rather than however you'd choose to split them, and the company is member-managed by default unless the certificate of formation states the LLC will have managers.

It supports that protection. Texas law makes a charging order the exclusive creditor remedy against a member's LLC interest, and a 2023 amendment confirmed this applies to single-member LLCs too. The liability shield can still be pierced, but only on a showing of actual fraud for the member's direct personal benefit, a high bar.

Texas has no flat annual LLC fee like California's $800 minimum. Instead, LLCs owe a revenue-based franchise tax only above a threshold ($2,650,000 for 2026-2027), administered by the Comptroller. Every LLC, even those owing $0, must still file a Public or Ownership Information Report each year by May 15.

No. You file a Certificate of Formation ($300 fee) with the Texas Secretary of State to form the LLC, but the company agreement itself is an internal document you keep with your own business records. It's never submitted to the state, and Texas has no separate annual report filed with the Secretary of State.

Yes, broadly. Texas law lets a company agreement expand, restrict, or, as of a 2025 amendment, fully eliminate fiduciary duties, including the duty of loyalty, if the agreement affirmatively says so. This is more permissive than many states, so review any such provision carefully before signing.