California LLC Operating Agreement Template

What California actually requires — and why you still want this in writing

Under the Revised Uniform Limited Liability Company Act, a California LLC's operating agreement can be oral, in a record, or implied by the members' conduct. A writing is legally required only to vary the statutory default rules or to modify a manager's fiduciary duties. In practice, most LLCs need exactly that — a custom management structure, specific profit-sharing, or restrictions on transferring membership interests — none of which the statutory defaults provide on their own. Banks and lenders also commonly ask to see a written operating agreement before opening a business account or extending credit, even though the state itself doesn't require one for most LLCs.

The $800 annual tax applies from year one

Every LLC organized in California, or doing business in California, owes an $800 annual minimum franchise tax to the Franchise Tax Board — this applies from the LLC's first taxable year. A temporary first-year exemption existed for LLCs formed between 2021 and the start of 2024, but that exemption has expired, so it no longer applies to LLCs formed now.

The clauses, explained

Formation and members

The LLC's name and its members with their ownership percentages.

Management structure

Whether the LLC is member-managed or manager-managed — this is exactly the kind of default California lets you override.

Capital contributions and allocations

What each member contributed, and how profits, losses, and distributions are shared — again, a default you can customize.

Fiduciary duty modifications

Any changes to a manager's default fiduciary duties, which California specifically requires to be in writing.

Dissolution

The events that trigger winding up the LLC.

Requirements checklist

• No default requirement for a written agreement

  California LLCs are not required to have a written operating agreement — oral or implied agreements are legally sufficient by default.

  Cal. Corp. Code §17701.02(s)

• Writing required to vary defaults or modify fiduciary duties

  A written operating agreement is required specifically to depart from the statutory default rules or to modify a manager's fiduciary duties.

  Cal. Corp. Code §17701.10

• $800 annual minimum franchise tax, from year one

  Every California LLC owes an $800 annual minimum tax to the Franchise Tax Board starting with its first taxable year — the temporary first-year exemption for 2021–2023 formations has expired.

  California Franchise Tax Board — LLCs

How to use this template

1. Enter the LLC and its members. Type the LLC name and each member's ownership percentage into the highlighted blanks.
2. Choose the management structure. Pick member-managed or manager-managed in the selector above the agreement to override California's statutory default.
3. Set contributions, allocations, and distributions. Fill in each member's capital contribution and how profits, losses, and distributions are shared.
4. Sign, download and keep it with your LLC's records. Each member signs on their own signature line, then download the agreement as a Word or PDF file — banks and lenders commonly ask to see it even though California doesn't require one by default.

Frequently asked questions

Related templates

• Capital Contribution Agreement Template (US)
• Independent Contractor Agreement Template (US)