Texas LLC Operating Agreement Template (PDF & Word) – 2026

What follows is a free LLC operating agreement in Texas template, plus a guide to filling it out correctly. If you read past the download buttons, you will pick up the patterns that make these documents enforceable and the patterns that get them thrown out. The combination matters more than the template itself.

This page provides a free, Texas-compliant LLC Operating Agreement template in both PDF and Microsoft Word format. The template incorporates Texas-specific statutory references, mandatory disclosures, and best-practice provisions. Download the version that fits your workflow, customize the bracketed fields, and execute according to the signing instructions below.

A Concrete Example

Two friends form an LLC in Texas to run a marketing consultancy. They each contribute $5,000 and agree to split profits 50/50. Eighteen months in, one of them lands a major client and starts working 60 hours a week while the other coasts at 10 hours a week. With no operating agreement, the default 50/50 split keeps both equal. With a properly drafted operating agreement, the active partner has options: distributions weighted by hours, a buyout trigger if the inactive partner falls below an effort threshold, or a salary draw for the active partner before profit splits.

That single drafting choice — adding effort-weighted distributions to the operating agreement up front — prevents the most common cause of LLC dissolution among friends: the gradual realization that one person is doing all the work for half the upside. The template below includes both the standard 50/50 structure and the alternative weighted-distribution language for when partners want to plan for the unequal effort scenario.

Texas LLC Operating Agreement: Legal Framework

Texas LLCs are governed by the Texas Business Organizations Code (BOC) Chapter 101. Texas is one of the few states with NO state income tax on LLC profits, and the Texas franchise tax has a $1.23 million revenue exemption (2024 threshold) — meaning small and mid-sized Texas LLCs pay zero state-level tax.

Texas requires LLCs to file a Public Information Report (PIR) annually with the Comptroller, even if no franchise tax is owed. The PIR is free to file but missing it can trigger forfeiture of the LLC’s certificate of formation.

BOC §101.052 gives Texas LLCs the broadest contractual flexibility of nearly any state — the company agreement can modify almost every default rule, including fiduciary duties (subject to a duty not to act in bad faith). This makes Texas particularly attractive for sophisticated multi-member LLCs and joint ventures.

Key Provisions to Include

• Company name and principal office. The exact legal name as registered, and the address of the principal place of business.
• Members and capital contributions. Each member’s name, percentage interest, and initial capital contribution (cash, property, services).
• Management structure. Member-managed (every member has authority to bind the LLC) or manager-managed (only designated managers have authority). State the default in the articles of organization to ensure consistency.
• Voting and quorum. Per-capita, per-interest, or per-class voting. Quorum thresholds for major decisions vs. ordinary business.
• Distributions. When and how profits are distributed — pro-rata to membership interests is the default, but waterfalls, preferred returns, and tiered distributions can be specified.
• Allocations of profit and loss. Tax allocations under IRC §704(b) — usually pro-rata to interests, but special allocations require substantial economic effect.
• Transfer restrictions. Right of first refusal, tag-along, drag-along, and consent requirements for member transfers.
• Buyout provisions. What happens on a member’s death, disability, divorce, bankruptcy, or voluntary withdrawal.
• Dissolution. Events that trigger dissolution and the procedure for winding up.
• Indemnification. The LLC’s obligation to indemnify members, managers, and officers for liabilities arising from LLC activities.
• Books and records. What records the LLC will maintain and members’ inspection rights.
• Tax matters. Tax election (default partnership, or check-the-box for S-corp or C-corp treatment); designation of partnership representative under BBA.

Common Mistakes to Avoid

• Skipping the operating agreement entirely. Defaults are rarely what the members would have negotiated. For single-member LLCs, skipping the agreement also weakens the limited liability shield in piercing-the-veil cases.
• Using a template from the wrong state. State LLC acts differ on default rules for management, voting, transfer restrictions, and fiduciary duties.
• Inconsistency between articles of organization and operating agreement. The articles control on matters that must be in the articles (e.g., manager-managed designation in some states).
• No provision for member exit. Without buyout provisions, a member who wants out can force a dissolution sale or hold the LLC hostage.
• Vague capital contribution descriptions. «Services to be rendered» creates tax and valuation disputes. Specify the dollar value and timing.
• Forgetting the tax election. The default is partnership taxation for multi-member LLCs and disregarded entity for single-member. S-corp or C-corp elections must be filed timely on Form 2553 or 8832.
• Missing state-specific filings. Annual reports, franchise taxes, and (in New York) publication. Missing them can administratively dissolve the LLC.

Frequently Asked Questions

Are Texas LLCs required to have a company agreement?

No, Texas law does not require an LLC to have a written company agreement, but it is strongly recommended. Without one, the LLC operates under the default rules of the Texas BOC, which may not reflect the members’ intent.

Does Texas have a state income tax on LLCs?

No. Texas has no state income tax on individuals or LLC profits. LLCs taxed as pass-through entities pay no state-level income tax. However, the Texas franchise tax (margin tax) applies to LLCs with revenue over the no-tax-due threshold ($1.23M in 2024).

What is the Texas franchise tax?

The Texas franchise tax is a privilege tax on entities doing business in Texas. The rate is 0.375% for retail/wholesale and 0.75% for other businesses, calculated on the lesser of margin alternatives. LLCs under $1.23M in revenue (2024) owe no tax but must file an annual Public Information Report.

Can a Texas LLC waive fiduciary duties?

Yes, to a remarkable extent. Texas BOC §101.401 allows the company agreement to expand, restrict, or eliminate any duty owed by a member or manager, subject only to a duty not to act in bad faith. This contractual freedom is one of Texas’s most attractive LLC features.

What is the Texas Public Information Report?

The PIR is an annual filing with the Texas Comptroller that lists the LLC’s officers, directors, and members. It is free to file but mandatory. Missing the deadline can trigger forfeiture of the LLC’s certificate of formation.

Can a Texas LLC have a single member?

Yes. Single-member LLCs are fully recognized in Texas and are taxed as disregarded entities federally (default).

How do I form a Texas LLC?

File a Certificate of Formation (Form 205) with the Texas Secretary of State. Filing fee is $300. Online filing is the fastest. Adopt a company agreement after formation.

Is the company agreement filed with the state?

No. Texas does not require the company agreement to be filed publicly. It is an internal document.

Download the Free Texas LLC Operating Agreement

Both versions below are the same Texas-compliant document, formatted for different workflows. The PDF is ready to print and execute. The Word version is editable in Microsoft Word, Google Docs, or LibreOffice.

The template above is a starting point — not a substitute for legal counsel. State laws change, court interpretations evolve, and individual circumstances vary in ways a generic form cannot anticipate. We update this template at least annually, but verify the current state-specific requirements before relying on it for any significant transaction. Consult an attorney for stakes above $25,000 or any disputed matter.

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