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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.

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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