Virginia LLC Operating Agreement: What the Default Rules Say and What to Write
Virginia does not require an LLC to have an operating agreement. The State Corporation Commission (SCC) does not collect one, and it is never filed with the state. Once members agree to an operating agreement, though, it binds the LLC whether or not the LLC signs it. If you never write one, Virginia's default rules govern your LLC, and several of those defaults may not match how you want the business run. This guide covers the statutory defaults, what a Virginia LLC operating agreement should contain, and how to get one.
What Virginia law says about operating agreements
The Virginia Limited Liability Company Act is Title 13.1, Chapter 12 of the Code of Virginia. Under Va. Code 13.1-1023, members may agree to any terms that are not inconsistent with Virginia law or the articles of organization. All members must agree to the operating agreement initially. The agreement does not have to be in writing unless the articles or a written agreement require it. Unless the agreement says how it is amended, all members must agree to any amendment.
Single-member LLCs have one additional rule. Under 13.1-1023(A)(2), the operating agreement of a single-member LLC is deemed to include any writing the member signs that relates to the LLC's affairs. If the LLC has a manager who is not the member, any agreement between the member and the LLC is also part of that agreement. A Virginia single member LLC operating agreement can be short, but it should still be a signed document that describes how the entity is run.
The default rules if your agreement is silent
When the operating agreement does not address a point, these statutory defaults apply:
- Management: Management is vested in the members unless the articles or an agreement provide for managers (13.1-1022(A)).
- Voting: Members vote in proportion to their contributions, and a majority vote is a majority of the voting power (13.1-1022(B) and (C)).
- Profits and losses: Profits and losses follow the value of each member's contributions as stated in the LLC's records (13.1-1029). They are not split by percentage of ownership.
- Dissolution: Unanimous written consent of the members dissolves the LLC unless the agreement provides otherwise (13.1-1046).
The profit rule catches many owners off guard. If one member puts in most of the money but the members want to split profits equally, that split must be written into the agreement. Without it, the statute points to the stated value of contributions in the LLC's records, so keep those records accurate.
Limited liability works differently. Under 13.1-1019, no member, manager or organizer is personally liable for LLC debts solely because of that role, in a single-member or multi-member LLC. An operating agreement does not create that protection, and a missing agreement does not remove it. Keeping separate bank accounts, signing contracts in the LLC's name, and maintaining clean records are what help the protection hold up over time.
Why write one anyway
Because the defaults are blunt, a written agreement is worth the effort for most LLCs. It lets you:
- Set voting and profit splits that do not follow contributions.
- Say who manages the business and who may sign contracts and open accounts.
- Decide what happens when a member leaves, dies, or wants to sell.
- Set rules for admitting new members.
- Set how disputes and dissolution are handled.
Many banks ask for an operating agreement before opening business accounts or approving loans, so confirm with yours. For a single-member LLC, a short agreement also documents that the business is a separate entity from you personally.
What to include: checklist
Use this table as an outline. Each row is a section your agreement should address, even if the answer is short.
| Section | What to write |
|---|---|
| Name and date | The exact LLC name as shown in the Articles of Organization, and the agreement's effective date. |
| Members and contributions | Each member's name and address, what each contributed, and the stated value of each contribution. |
| Management structure | Member-managed or manager-managed, and who may sign contracts, open accounts, and bind the LLC. |
| Voting rules | Which decisions need a majority, a supermajority, or unanimous consent, and how votes are counted. |
| Profit and loss allocation | How profits and losses are split, and whether that split differs from contributions. |
| Distributions | When and how cash is paid to members. |
| Capital calls | Whether members must contribute more money, how much, and what happens if a member does not. |
| Transfer and buy-sell terms | Limits on selling or assigning a membership interest, and how it is valued for a buyout. |
| Admitting new members | The vote and process required to bring in a new member. |
| Records | The LLC must keep records at its principal office. List which records are kept and who maintains them. |
| Amendment method | How the agreement may be changed and who must approve. Without this, all members must agree (13.1-1023). |
| Dissolution | The events that trigger dissolution and the steps for winding up. For the filing steps, see how to dissolve an LLC in Virginia. |
How profits, losses and other items are allocated for tax purposes in a multi-member LLC is a question for a CPA, not something a template can settle. Your agreement should match what your tax preparer will file.
Three ways to get a Virginia LLC operating agreement
- A template. A form is the lowest-cost route and can work for simple single-member or owner-managed LLCs. Check that it refers to Virginia's Limited Liability Company Act (Title 13.1, Chapter 12) and not another state's law, and that it covers every item in the table above. Template prices vary, so check the vendor's website for current pricing. An operating agreement is not an SCC filing form, so look to private sources for a template.
- A formation service that includes one. Some online formation services bundle an operating agreement with the Articles of Organization. Confirm whether the document is customized to your answers or generic, what it covers, and the current price on the provider's site.
- A Virginia attorney. A lawyer is the right choice when you have multiple members, outside investors, real estate held by the LLC, or a buy-sell arrangement that must work if a member dies or leaves. Ask for a fee quote before you engage one, because lawyer rates vary.
Filing versus private document
Your Articles of Organization (Form LLC1011) cost $100 and are filed through the SCC Clerk's Information System (CIS) at cis.scc.virginia.gov. The operating agreement is a separate, private document. You do not file it with the SCC, and it does not appear in the state's public record. Virginia LLCs also file no annual report. They pay a $50 annual registration fee to the SCC instead. For the formation steps, see our guide to starting an LLC in Virginia. For fees and due dates, see our annual fees and registration renewal guide.
Disclaimer
This article is informational content, not legal or tax advice. Operating agreements affect ownership, liability, and taxes, and the right terms depend on your facts. Consult a qualified Virginia attorney and a CPA before you sign one.