# California LLC Operating Agreement: Required, Default Rules, and What to Include

> Is an operating agreement required for a California LLC? What state law supplies without one, key clauses, and how to assign your LLC interest to a trust.

Source: https://ridleylawoffices.com/california-llc-operating-agreement/

**Short answer:** No. California doesn’t require an LLC to have a written operating agreement. Under [Corp. Code § 17701.02(s)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17701.02) the agreement can be oral, written, implied, or any mix, and where it’s silent the California Revised Uniform Limited Liability Company Act fills the gap. Those default rules rarely match what owners assume, so put the agreement in writing.

- The Act starts at [Corp. Code § 17701.01](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17701.01) and governs every California LLC. The operating agreement controls, and the Act supplies the rule when the agreement doesn’t ([§ 17701.10(a)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17701.10) and (b)).
- With no written voting provision, members vote in proportion to their interests in current profits, and anything outside the ordinary course needs every member ([§ 17704.07(r)(1)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17704.07) and (b)(4)).
- With no agreement, profits and distributions follow capital contributed, not headcount ([§ 17704.04](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17704.04)).
- Some default rules can be changed only by a written agreement ([§ 17701.10(d)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17701.10)).
- An individual member’s death ends that person’s membership and leaves the estate holding only a transferee’s rights ([§ 17706.02(f)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17706.02) and [§ 17706.03(a)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17706.03)).

The operating agreement is the LLC’s rulebook. California’s LLC statute has a rulebook of its own that applies to every question your agreement leaves open, and you may not like its answers. This page covers what the statute supplies, the clauses worth negotiating, and how the agreement ties into a living trust.

## Does a California LLC need an operating agreement?

Not a written one. [Corp. Code § 17701.02(s)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17701.02) defines the operating agreement as the agreement of all the members, “whether oral, in a record, implied, or in any combination thereof,” and it expressly includes a sole member. A one-member LLC’s agreement isn’t unenforceable because only one person is a party to it.

You’ll see sites say [§ 17701.10](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17701.10) “requires” an operating agreement. It doesn’t. That section says what the operating agreement governs and that the Act governs anything the agreement doesn’t cover ([§ 17701.10(a)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17701.10) and (b)).

Nothing in the Act requires the agreement to be notarized or filed with the Secretary of State. The LLC keeps it with its records, if it’s in writing ([§ 17701.13(d)(5)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17701.13)). A person who becomes a member is deemed to assent to the agreement ([§ 17701.11(b)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17701.11)). A signature isn’t what makes it binding, though signatures are still the best proof of who agreed to what.

## What happens if my California LLC has no operating agreement?

The Act’s default rules control, and they run on assumptions that fit a casual partnership better than most businesses. The table shows the ones that matter most.

| Question | Default rule with no agreement | Authority |
| --- | --- | --- |
| Who manages? | The members, unless the articles of organization say the LLC is manager-managed | [§ 17704.07(a)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17704.07) |
| How do members vote? | In proportion to each member’s interest in current profits, unless the articles or a written agreement set another basis | [§ 17704.07(r)(1)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17704.07) |
| Ordinary business disagreements | Decided by a majority of the members | [§ 17704.07(b)(3)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17704.07) |
| Anything outside the ordinary course | Requires the consent of all members | [§ 17704.07(b)(4)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17704.07) |
| Amending the agreement | Requires the consent of all members | [§ 17704.07(b)(5)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17704.07) |
| Who splits the money? | Distributions, profits, and losses follow the value of contributions shown in the LLC’s records | [§ 17704.04(a)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17704.04) and (e) |
| Adding a new member | Requires the consent of all members | [§ 17704.01(c)(3)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17704.01) |
| Can one member bind the LLC? | Yes, in a member-managed LLC every member is an agent for the business | [§ 17703.01(a)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17703.01) |
| Pay for a member who works in the business | None, apart from reasonable pay for winding up | [§ 17704.07(e)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17704.07) |
| Selling or assigning an interest | Permitted, but the buyer gets distributions only, with no vote | [§ 17705.02(a)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17705.02) |
| A member dies | The member is dissociated and the estate holds a transferee’s rights | [§ 17706.02(f)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17706.02), [§ 17706.03(a)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17706.03) |

An example shows how that plays out. Maria puts $60,000 into an LLC that buys a rental duplex in Oxnard, and her friend Dev puts in $40,000. They shake hands and never write anything down. Maria assumes she controls 60 percent of the decisions, and on most votes she may be right. With no written voting provision, members vote in proportion to their interests in current profits ([§ 17704.07(r)(1)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17704.07)), so if their profit shares track the $60,000 and $40,000 they put in, Maria casts 60 percent of the vote. Distributions follow the same split ([§ 17704.04(a)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17704.04)). What surprises her is the rest of the statute. Any act outside the ordinary course, like selling the duplex, needs both of them ([§ 17704.07(b)(4)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17704.07)), so Dev holds a veto on the decision that matters most. The same section also says an ordinary-course disagreement is decided by “a majority of the members” ([§ 17704.07(b)(3)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17704.07)), which reads like a head count and sits uneasily beside the proportional rule. With two members, that ambiguity is an argument waiting to happen, and a written voting clause ends it.

## Which provisions can be changed only in a written agreement?

Most default rules can be varied by any form of agreement, including an oral one, but a short list can be varied only in writing. [§ 17701.10(d)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17701.10) names [§ 17701.13](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17701.13) (office, agent, and records), [§ 17703.01](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17703.01) (a member’s authority to bind the LLC), [§ 17704.08](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17704.08) (reimbursement and indemnification), and parts of [§ 17704.07](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17704.07): subdivisions (f) to (r) and (u) to (w), which include the rules on member meetings.

The fiduciary duties members and managers owe each other can be modified only in a written operating agreement with the informed consent of the members, and signing the agreement doesn’t by itself count as informed consent ([§ 17701.10(e)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17701.10)). Some things can’t be changed at all, including eliminating the duty of loyalty and taking away a member’s right to inspect records ([§ 17701.10(c)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17701.10) and (d)).

## Single-member LLC: do I still need an operating agreement?

Yes, and a single-member LLC’s agreement is fully enforceable ([§ 17701.02(s)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17701.02)). For a sole owner the agreement does three jobs the statute doesn’t do for you: it records that the LLC is a separate business with its own rules, it names who steps in as manager if you become incapacitated, and it says what happens to the LLC when you die.

That last point matters most. An LLC dissolves after 90 consecutive days with no members, but when a sole member dies the membership interest can pass to heirs by will or by law, and an heir becomes a substituted member without anyone’s consent ([§ 17707.01(c)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17707.01)). The last member’s legal representative can also designate a new member within 90 days ([§ 17704.01(c)(4)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17704.01)). Without a trust, that usually runs through the probate of your estate. With a living trust holding the interest, it doesn’t, as covered below.

## Married owners and spouses as members

Property acquired during a California marriage is presumed to be community property ([Fam. Code § 760](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=FAM&sectionNum=760)), which includes an LLC interest bought or built during the marriage. In a divorce the court divides the community estate equally unless the spouses agree otherwise ([Fam. Code § 2550](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=FAM&sectionNum=2550)). Without a clause addressing this, a divorce can leave a non-member ex-spouse owning part of an interest.

For federal tax purposes, an LLC wholly owned by spouses as community property can be treated either as a disregarded entity or as a partnership, and the IRS will accept the position the spouses choose and report consistently (Rev. Proc. 2002-69, sections 3 and 4). California follows the federal classification (FTB, Limited liability company page). The agreement should say which way you’re filing, and it should say what happens to the interest in a divorce.

## Manager-managed or member-managed: which should I choose?

An LLC is member-managed unless the articles of organization say it’s manager-managed ([§ 17704.07(a)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17704.07)). Pick member-managed when the owners all work in the business and will make decisions together. Pick manager-managed when some owners are passive, when a parent is running a family LLC for children, or when a lender or partner wants a single decision-maker.

The difference shows up in authority. In a manager-managed LLC, members acting only as members can’t bind the company and managers can ([§ 17703.01(b)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17703.01)). Managers need not be members ([§ 17704.07(c)(6)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17704.07)), and a majority of the members can remove a manager at any time without cause unless a contract says otherwise ([§ 17704.07(c)(5)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17704.07)). A manager-managed structure also has to be stated in the articles ([§ 17702.01(b)(5)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17702.01)), so it isn’t something to fix later in a side letter.

## What clauses should a California operating agreement contain?

The Act leaves most business terms to you. The clauses below are the ones I’d want in front of any owner, in the order they tend to matter.

1. **Capital and ownership.** Who contributed what, what each percentage means, and whether more money can be demanded. The default ties everything to contributions ([§ 17704.04(a)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17704.04)), and contributions can be compromised only by consent of all members ([§ 17704.03(b)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17704.03)).
2. **Management and voting.** Manager or member managed, whether votes count by head, by percentage, or by class, and which decisions need a supermajority or unanimity. Default unanimity for extraordinary acts ([§ 17704.07(b)(4)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17704.07)) gives every member a veto.
3. **Distributions and tax.** When cash goes out, in what shares, and whether the LLC distributes enough to cover the members’ income taxes on profit they never received.
4. **Transfer restrictions.** A transfer made in violation of a restriction in the agreement is ineffective as to anyone who has notice of the restriction ([§ 17705.02(f)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17705.02)). That makes a well-drafted restriction enforceable, and it makes a badly drafted one a trap when you want to move your own interest into a trust.
5. **Admission and removal of members.** A new member needs all members’ consent by default ([§ 17704.01(c)(3)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17704.01)) and is deemed to assent to the agreement on joining ([§ 17701.11(b)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17701.11)). Expulsion is available by unanimous consent in limited cases, under the agreement’s terms, or by court order ([§ 17706.02(c)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17706.02) to (e)).
6. **Death, incapacity, and divorce.** A buy-sell clause that says who can or must buy the interest, at what price, on what terms, and how it’s funded. It should also cover a member’s incapacity, because in a member-managed LLC the appointment of a guardian or conservator for a member, or a court finding that the member can’t perform, dissociates that member ([§ 17706.02(f)(2)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17706.02)).
7. **Deadlock and exit.** A process for a tie, and a way for someone to leave that doesn’t require a lawsuit.
8. **Fiduciary duties and indemnification.** What members and managers owe each other, and what the LLC will cover. Reimbursement and indemnification default to the Act ([§ 17704.08(a)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17704.08)), and changing the duties requires a writing and informed consent ([§ 17701.10(e)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17701.10)).
9. **Records and information.** The LLC must keep specific records at its office, including the member list, the articles, six years of tax returns, and the operating agreement ([§ 17701.13(d)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17701.13)). The agreement can add reporting duties for the manager.

## What happens to an LLC interest when a member dies?

An individual member who dies is dissociated ([§ 17706.02(f)(1)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17706.02)), and from that moment the interest is owned only as a transferee’s interest, with distribution rights but no vote ([§ 17706.03(a)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17706.03)). The member’s executor or other legal representative can exercise the member’s rights for the purpose of settling the estate, including any power the member had to let a transferee become a member ([§ 17706.03(c)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17706.03)).

The interest itself is personal property ([§ 17705.01](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17705.01)), so if it isn’t in a trust and has no beneficiary designation, it passes through probate. If the interest and the rest of the estate come to more than $208,850 for a death on or after April 1, 2025, the small estate affidavit under Prob. Code § 13100 isn’t available, and the estate goes through probate, which takes twelve to eighteen months by my practice figure. Meanwhile the surviving members are running the company with a deceased member’s estate as a silent counterparty.

A buy-sell clause is the fix on the business side. It can require or permit the surviving members or the LLC to buy the interest at a formula or appraised price, fund the purchase with life insurance, and give the family cash instead of a minority stake they can’t sell. For an owner with a business that outlasts one person, my [business succession planning](https://ridleylawoffices.com/business-succession-planning-california/) practice starts from this clause.

## How do I put my LLC interest into my living trust?

Assign the membership interest to the trustee in a signed written assignment, and make sure the operating agreement allows it first. The interest is personal property ([§ 17705.01](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17705.01)), so it can be assigned like any other asset, and a trustee is a “person” who can hold it ([§ 17701.02(v)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17701.02)).

The operating agreement can block your own assignment, so sequence counts. A transfer that violates a restriction in the agreement is ineffective as to a person who knows of the restriction ([§ 17705.02(f)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17705.02)). A typical “no transfers without unanimous consent” clause means a transfer to your own trust may not be valid until the other members approve it. Even a valid transfer gives the trustee only a transferee’s rights, meaning distributions but no vote and no access to records, unless the trustee is admitted as a member ([§ 17705.02(a)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17705.02) and [§ 17704.01(c)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17704.01)).

A clean setup has four parts:

1. The operating agreement lists a member’s revocable trust as a permitted transferee that becomes a member without further consent.
2. You sign an assignment of the interest to “\[Names\], Trustees of the \[Family\] Trust” and give the LLC notice, since the LLC needn’t recognize a transferee’s rights until it has notice ([§ 17705.02(e)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17705.02)).
3. The LLC updates its member list and records ([§ 17701.13(d)(1)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17701.13)).
4. The trust names a successor trustee who can manage the interest. The operating agreement treats a trustee change as a non-event.

Once the trust is the member, a successor trustee stepping in doesn’t dissociate the trust as a member ([§ 17706.02(h)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17706.02)). The death of the person who created the trust changes the person serving as trustee. The LLC keeps its member. The interest skips probate, and the successor trustee can vote it the day after you die or become incapacitated. See [trust funding](https://ridleylawoffices.com/trust-funding/) for the rest of the assets that should go into the same trust, and the [revocable trust](https://ridleylawoffices.com/estate-planning-glossary-california/revocable-trust/) entry for how the trust itself works.

One tax point for LLCs that own California real property. A change in control of an LLC, or a change in ownership through transfers of interests, triggers a filing with the State Board of Equalization within 90 days ([Rev. & Tax. Code § 480.1](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=RTC&sectionNum=480.1) and [Rev. & Tax. Code § 480.2](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=RTC&sectionNum=480.2)). A missed filing carries a penalty of 10 percent of the taxes applicable to the new base year value ([Rev. & Tax. Code § 482(b)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=RTC&sectionNum=482)). Whether a specific transfer to your own trust triggers that filing depends on the facts, and it’s a question to answer before you sign the assignment.

## How do I add or remove a member?

The agreement controls, and if it says nothing, a person becomes a member with the consent of all members ([§ 17704.01(c)(3)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17704.01)). The new member is deemed to assent to the operating agreement ([§ 17701.11(b)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17701.11)), so the agreement needs to be current before anyone joins, not after.

Removal is harder. Without an agreement, a member can be expelled only by unanimous consent of the others for the specific reasons in [§ 17706.02(d)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17706.02), or by a court on the LLC’s application under [§ 17706.02(e)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17706.02). If a departure is planned, set the buyout price and payment terms now, while nobody is angry.

## Should I use an online template or have an operating agreement drafted?

A signed template beats an oral agreement, and it beats nothing. Templates fail in predictable places: they don’t fit your ownership split, they carry another state’s defaults, and they don’t include a carve-out for a transfer to your trust, a divorce clause, or a buy-sell price. Each of those gaps produces a fight or a probate at the worst time.

The agreement should be tailored to the number of owners, whether the LLC holds real estate, and whether any owner has a spouse or a trust. For a rental property held in an LLC, see my [rental LLC guide](https://ridleylawoffices.com/guides/rental-llc/). Flat-fee [entity formation](https://ridleylawoffices.com/entity-formation/) includes the operating agreement, and the amounts are on my [fees](https://ridleylawoffices.com/fees/) page.

## Frequently asked questions

### Is an operating agreement required for a single-member LLC in California?

No, but you should have one. The Act treats a sole member’s agreement as enforceable ([§ 17701.02(s)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17701.02)), and a written one records how the LLC is managed and what happens if you die or become incapacitated. Without it, the Act’s default rules decide.

### What happens if my LLC doesn’t have an operating agreement?

The default rules in the Act apply ([§ 17701.10(b)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17701.10)). Members vote in proportion to their interests in current profits, distributions follow contributions, and unanimous consent is needed for anything outside the ordinary course ([§ 17704.07(r)(1)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17704.07) and (b)(4), and [§ 17704.04(a)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17704.04)).

### Does an operating agreement have to be notarized or filed with the state?

No. The Act doesn’t require notarization or a filing with the Secretary of State. The LLC keeps a written agreement with its records ([§ 17701.13(d)(5)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17701.13)). Notarizing is useful if you’re proving the signatures to a bank or lender, and that’s a business choice.

### Can an operating agreement be oral?

Yes. The statute recognizes oral, written, and implied agreements or any combination ([§ 17701.02(s)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17701.02)). The problem is proof. A written agreement is also the only way to vary certain default rules ([§ 17701.10(d)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17701.10)).

### Who has to sign the operating agreement?

Every member. The operating agreement is the agreement of all the members ([§ 17701.02(s)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17701.02)), and a person who becomes a member is deemed to assent to it ([§ 17701.11(b)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17701.11)). Signatures from every member and from the LLC remove any later argument about who agreed.

### Can I transfer my LLC interest to my living trust?

Yes, if the operating agreement permits it. A transfer in violation of a restriction is ineffective as to a person with notice ([§ 17705.02(f)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17705.02)), so the agreement should name the member’s revocable trust as a permitted transferee before the assignment is signed.

### What happens to my LLC when I die?

You’re dissociated as a member ([§ 17706.02(f)(1)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17706.02)) and your estate holds a transferee’s interest ([§ 17706.03(a)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17706.03)). If the interest is in your living trust, the successor trustee steps in, and the trust isn’t dissociated by a change of trustee ([§ 17706.02(h)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CORP&sectionNum=17706.02)).

More on this

- [California LLC and entity formation](https://ridleylawoffices.com/entity-formation/)
- [California LLC annual requirements and compliance calendar](https://ridleylawoffices.com/california-llc-annual-requirements/)
- [The California LLC $800 annual tax](https://ridleylawoffices.com/california-llc-800-tax/)
- [Business law attorney](https://ridleylawoffices.com/business-law-attorney/)
- [Business succession planning in California](https://ridleylawoffices.com/business-succession-planning-california/)
- [Rental property LLC guide](https://ridleylawoffices.com/guides/rental-llc/)
- [Trust funding: the step that gets skipped](https://ridleylawoffices.com/trust-funding/)

This guide is part of the [LLC vs. S Corp in California](https://ridleylawoffices.com/llc-vs-s-corp-california/) series. See all the [business owner guides](https://ridleylawoffices.com/business-guides/).

[Talk to Eric](https://ridley.click/eric-60)

Book a consultation at [ridley.click/eric-60](https://ridley.click/eric-60) or call 805-244-5291. I work with LLC owners in Ventura, Santa Barbara, and Los Angeles counties by Zoom or phone, and a mobile notary comes to you for any document that needs one.