Utah Single-Member LLC Operating Agreement
Create a Utah single-member LLC operating agreement with state-specific guidance on distribution defaults, taxes, and liability protection.
Introduction
A single-member LLC operating agreement is the internal document where you, as the sole owner of a Utah LLC, set the rules for how your business runs, how distributions are shared, and what happens if you bring on a partner or close the business later. Utah does not require an operating agreement to be in writing, even for a single member, and an oral or implied agreement is legally valid, unlike some states that require writing for fiduciary-duty changes. Without one, Utah defaults to splitting distributions in equal shares among members, not by ownership percentage, which matters the moment you add a second member.
Key Things to Know
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Written form is not required for a Utah operating agreement, even for a single member; oral or implied terms are legally valid (Utah Code Section 48-3a-102).
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Without an operating agreement, Utah law shares distributions among members in equal shares, not in proportion to capital contributions (Utah Code Section 48-3a-404).
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An LLC is member-managed by default. Switching to manager-managed requires the operating agreement to expressly say so (Utah Code Section 48-3a-407).
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A charging order is the exclusive remedy for a member's personal creditors against that member's LLC interest, but if you are a sole member, a court can foreclose that lien, and the purchaser takes your entire interest and becomes the new member (Utah Code Section 48-3a-503(6)).
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Utah has no annual franchise tax on LLCs. The recurring state obligation is an $18 Annual Report filed online with the Division of Corporations and Commercial Code each year.
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The operating agreement itself is not filed with the state. You form the LLC by filing a Certificate of Organization ($59 online) with the Utah Division of Corporations and Commercial Code.
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Even a flexible operating agreement can never eliminate the contractual obligation of good faith and fair dealing, or excuse a member's or manager's bad-faith, willful, or reckless conduct (Utah Code Section 48-3a-112).
Key decisions before you file
Before you file a LLC Operating Agreement in Utah, 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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Utah Requirements for LLC Operating Agreement
The LLC has been or will be formed by filing a Certificate of Organization, not Articles of Organization, with the Utah Division of Corporations and Commercial Code ($59 filing fee). The LLC is formed when the certificate becomes effective and at least one person becomes a member. The Certificate of Organization and this Operating Agreement together govern the LLC's operations and member relationships.
A debt, obligation, or other liability of the LLC is solely the LLC's, and a member or manager is not personally liable for it solely by reason of being or acting as a member or manager (Utah Code Section 48-3a-304(1)). This protection is not lost merely because the LLC fails to observe formalities relating to its powers or management (Section 48-3a-304(2)), though it does not override a member's own liability for improper contributions (Section 48-3a-403) or improper distributions (Section 48-3a-406).
A person may become a member of a Utah LLC without making, or being obligated to make, any contribution at all (Utah Code Section 48-3a-401(4)). When a contribution is made, it may consist of property transferred to, services performed for, or another benefit provided to the LLC, or an agreement to do any of those things in the future (Section 48-3a-402).
Absent a contrary provision in the Operating Agreement, distributions made by the LLC before its dissolution and winding up must be shared in EQUAL SHARES among the members, not in proportion to the value of each member's capital contribution (Utah Code Section 48-3a-404). The Operating Agreement can, and for most multi-member LLCs should, set a different split.
A Utah LLC may not make a distribution if, after giving it effect, the LLC would be unable to pay its debts as they become due in the ordinary course of its activities, or the LLC's total assets would be less than the sum of its total liabilities plus the amount needed to satisfy members' and transferees' preferential rights on a hypothetical dissolution (Utah Code Section 48-3a-405).
A Utah LLC is member-managed by default. It becomes manager-managed only if the Operating Agreement expressly states the company is or will be "manager-managed," "managed by managers," or that management is or will be "vested in managers," or uses words of similar import (Utah Code Section 48-3a-407). In a member-managed LLC, each member has equal management rights.
In a member-managed LLC, a matter in the ordinary course of the LLC's activities is decided by a majority of the members; a matter outside the ordinary course, such as selling substantially all of the LLC's property, requires the affirmative vote or consent of all members (Utah Code Section 48-3a-407(2)). Amending the Operating Agreement itself always requires the consent of all members, regardless of any lower threshold set for other decisions (Section 48-3a-407(2)(f)).
Members (in a member-managed LLC) or managers (in a manager-managed LLC) owe the LLC a duty of loyalty, including accounting for and holding as trustee any property, profit, or benefit derived in conducting LLC business, and a duty of care, which requires refraining from grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of law (Utah Code Section 48-3a-409). The Operating Agreement may alter or eliminate specific aspects of the duty of loyalty and may alter the duty of care, but may never eliminate the contractual obligation of good faith and fair dealing or excuse bad-faith, willful, or reckless conduct (Section 48-3a-112).
The LLC must reimburse a member of a member-managed LLC, or the manager of a manager-managed LLC, for payments properly made on the LLC's behalf, and must indemnify and hold that person harmless from a claim or liability arising from their status as a member or manager (Utah Code Section 48-3a-408). This mandatory indemnification does not apply to a claim, demand, debt, obligation, or liability arising from that person's own breach of Sections 48-3a-405, 48-3a-407, or 48-3a-409.
A member's transferable interest, the right to receive distributions, may be transferred in whole or in part (Utah Code Section 48-3a-502). The transfer does not by itself entitle the transferee to participate in LLC management or access LLC records, and does not by itself cause the transferring member's dissociation. The transferee receives only the distributions the transferor would otherwise have received.
A member dissociates from a Utah LLC on events including: the LLC's receipt of the member's notice of express withdrawal; an event specified in the Operating Agreement; a foreclosure sale transferring the member's entire interest; expulsion under the Operating Agreement or by unanimous vote of the other members for stated cause; judicial expulsion for wrongful conduct or material breach; and, in a member-managed LLC, the member's death, incapacity, bankruptcy, or assignment for the benefit of creditors (Utah Code Section 48-3a-602).
A Utah LLC dissolves upon the first to occur of: an event specified in the certificate of organization or Operating Agreement; the consent of all members; the passage of 90 consecutive days during which the LLC has no members (subject to statutory exceptions); a court order based on the LLC's operations being unlawful or impracticable; a court order based on illegal, fraudulent, or oppressive management conduct; or administrative dissolution by the Division of Corporations and Commercial Code (Utah Code Section 48-3a-701).
In a member-managed LLC, a member may inspect and copy LLC records on reasonable notice, and the LLC must furnish without demand any information it knows to be material to a member's rights and duties. In a manager-managed LLC, a member may make a written demand for specific information material to their rights and duties; the LLC must respond, in a record, within 10 days (Utah Code Section 48-3a-410).
The Operating Agreement must specify procedures for its amendment. Utah law provides that the Operating Agreement may be amended with the consent of all members, unless the agreement provides otherwise.
If establishing a Series LLC, the Operating Agreement must comply with Utah's Series LLC provisions, including maintaining separate records and accounting for each series and specifying the rights, powers, and duties of each series.
Frequently Asked Questions
It's the internal document where a Utah LLC's sole owner sets the rules for running the business and sharing distributions. Utah doesn't require it to be written, oral or implied terms are legally valid, but writing it down is the clearest proof the LLC is a real business, not just a personal wallet.
Not by blanket legal requirement. Utah's operating agreement can be oral, implied, or in a record, even for a sole member (Utah Code Section 48-3a-102). But without a written one, Utah's default rules fill every gap automatically, including a split you may not want.
Utah's default rules fill the gap, and the default may surprise you. Distributions before dissolution are shared in equal shares among members, not based on how much each member contributed, unless your agreement says otherwise (Utah Code Section 48-3a-404). That matters most once you add a second member.
It supports that protection, with a real limit. A charging order is Utah's exclusive remedy against a member's LLC interest, but for a sole member, a court can foreclose that lien, and the purchaser takes your entire interest and becomes the new member (Utah Code Section 48-3a-503(6)).
Utah LLCs owe no annual franchise tax. The recurring state obligation is an $18 Annual Report filed with the Division of Corporations and Commercial Code, due by the last day of your LLC's formation anniversary month, with a 30-day grace period before a late fee applies.
No. You file a Certificate of Organization ($59) with the Utah Division of Corporations and Commercial Code 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.
Broadly yes. The agreement can alter or eliminate aspects of the duty of loyalty and can alter the duty of care (Utah Code Section 48-3a-112), but it can never eliminate good faith and fair dealing entirely, or excuse bad-faith, willful, or reckless conduct.