North Dakota LLC Operating Agreement (2026)

Fact-checked by the LegalGlass editorial team against primary sources · Published Aug 6, 2026 · Last updated Aug 6, 2026

North Dakota does not require an LLC to have a written operating agreement, but adopting one is strongly recommended. The agreement is an internal document - you keep it with your records and do not file it with the North Dakota Secretary of State. It is governed by the North Dakota Uniform Limited Liability Company Act, codified at N.D. Century Code Chapter 10-32.1, and it controls ownership percentages, management, voting, and distributions. Where the agreement is silent, the statute's default rules apply.

Is an Operating Agreement Required in North Dakota?

North Dakota law does not compel a limited liability company to adopt a written operating agreement, and the North Dakota Secretary of State will register your LLC whether or not you have one. In that narrow legal sense, the document is optional. In practical terms, however, an operating agreement is the single most important internal record most LLCs will ever create, and skipping it is one of the more common and costly mistakes new owners make.

The reason is simple: an LLC without an operating agreement is not ungoverned - it is governed entirely by the state's default statute. Every question the owners have not answered for themselves is answered instead by the North Dakota Uniform Limited Liability Company Act. Those defaults are reasonable general rules, but they may not match how you and your co-owners actually intend to split profits, make decisions, or handle a member's exit. The operating agreement is how you override the defaults and write your own rules. Because North Dakota does not require the document, no one at the state will remind you to create it - the responsibility is entirely yours and your co-owners'.

An operating agreement is worth having even before disputes arise. Banks frequently ask to see it when you open a business account, potential investors and lenders review it during due diligence, and courts look to it when deciding whether your LLC is a genuinely separate entity entitled to the liability shield. For all of these reasons, treat the agreement as a core part of forming your company, alongside your articles of organization and your federal EIN.

What North Dakota Law Says: Chapter 10-32.1

North Dakota LLCs are governed by the North Dakota Uniform Limited Liability Company Act, codified as Chapter 10-32.1 of the North Dakota Century Code. This chapter is North Dakota's adaptation of the model uniform LLC act, and it defines what an operating agreement is, what it can and cannot do, and what happens when it is silent. The statute recognizes an operating agreement broadly: it may be oral, in a record (written), implied, or any combination, though a signed written agreement is by far the best practice because it is provable and unambiguous.

Chapter 10-32.1 gives members wide freedom of contract. Within limits set by the statute, the members may use the operating agreement to structure the company's internal affairs and the relations among the members, managers, and the LLC itself. There are a small number of provisions the agreement cannot override - for example, it generally cannot eliminate the duty of loyalty entirely, cannot unreasonably restrict a member's right to information, and cannot vary the rights of third parties who are not part of the agreement. Everything else is largely up to the members. Where the operating agreement addresses an issue, the agreement controls; where it does not, the statutory default supplies the answer. That relationship - agreement first, statute as backstop - is the core idea to understand.

What to Include in a North Dakota Operating Agreement

A thorough operating agreement anticipates the questions that cause conflict later and answers them in advance. While no two companies are identical, a strong North Dakota agreement typically addresses each of the following:

• Ownership percentages. Each member's ownership interest, often expressed as a percentage or number of units, and the total interests outstanding.
• Capital contributions. What each member has contributed - cash, property, or services - and whether and how additional contributions can be required.
• Management structure. Whether the LLC is member-managed or manager-managed, and the scope of each person's authority to act for and bind the company.
• Voting rights. How votes are allocated (per capita or by ownership percentage), what thresholds decisions require, and which decisions need unanimous consent.
• Distributions. How and when profits and losses are allocated and cash is distributed to members, and whether distributions track ownership percentages.
• Transfers and buy-sell rules. Whether a member may sell or assign an interest, rights of first refusal, and how an interest is valued on a buyout.
• Withdrawal, death, and dissociation. What happens when a member leaves, dies, becomes incapacitated, or is removed.
• Dissolution. The events that wind up the company and how remaining assets are distributed after creditors are paid.
• Amendment procedure. The vote or consent needed to change the agreement itself, and how amendments are recorded.

Because the operating agreement interacts with your tax elections, coordinate it with how the LLC will be taxed. A multi-member LLC is taxed as a partnership by default, a single-member LLC is a disregarded entity, and either can elect corporate or S-corporation treatment - decisions that affect how distributions and allocations should read. See our North Dakota LLC tax filing guide and the broader business tax hub for how these pieces fit together.

Member-Managed vs. Manager-Managed

One of the most important choices the operating agreement records is the company's management structure. In a member-managed LLC, the owners themselves run the business and each member generally has authority to act on the company's behalf in the ordinary course. This is the default and by far the most common arrangement for small North Dakota LLCs, where the owners are also the operators.

In a manager-managed LLC, the members appoint one or more managers - who may be members or outsiders - to run day-to-day operations, while the members step back into a more passive, investor-like role. Manager-managed structures suit companies with silent investors, many owners, or a desire to concentrate operational authority in a few hands. The operating agreement should state clearly which structure applies, name the managers or the method for choosing them, and define exactly what each person can and cannot do without a vote. Getting this right matters beyond internal harmony: third parties, including your registered agent and your bank, rely on knowing who has authority to sign for the company.

Single-Member vs. Multi-Member Agreements

Owners of single-member LLCs sometimes assume an operating agreement is pointless because there is no one to negotiate with. That reasoning is a mistake. For a single-member North Dakota LLC, the operating agreement documents that the company is a separate legal person from its owner - evidence that helps preserve the liability shield if a creditor later argues the LLC is merely the owner's alter ego. A solo agreement can also name a successor manager, specify what happens to the business on the owner's death or incapacity, and confirm the tax treatment the owner intends.

For a multi-member LLC, the operating agreement is even more essential because it is the rulebook governing the relationship among co-owners. It prevents the most damaging kinds of disputes by settling, in writing and in advance, how profits are split, how deadlocks are broken, how a member can exit, and how the interest of a departing or deceased member is valued and bought out. Without these terms, the members are left with only the statute's defaults, which may divide control or money in ways none of them intended. Whether you are one owner or several, keep the signed agreement with your permanent records alongside your annual report confirmations and formation documents.

Statutory Defaults and Why the Agreement Matters

The practical power of an operating agreement comes from its ability to displace North Dakota's default rules. When your agreement is silent on a point - or when you have no agreement at all - Chapter 10-32.1 fills the gap. Common statutory defaults address how members vote, how profits and distributions are shared, whether new members can be admitted, and the events that trigger dissolution. These defaults are sensible baseline rules, but they are generic; they were written for LLCs in the abstract, not for your specific business and your specific co-owners.

Consider a two-member LLC where one member contributed most of the startup capital and the other contributes most of the day-to-day work. The owners may intend to split profits 70/30, but if their agreement is silent, a default allocation could produce a different result than they expected. Or consider what happens when a member wants out: without a buy-sell provision, the owners must fall back on statutory rules that may not give them the orderly, valued buyout they would have preferred. Because North Dakota does not require the document, the state will not catch these gaps for you - the operating agreement is your only opportunity to write your own answers.

Finally, remember what the operating agreement is not. It is not filed with the North Dakota Secretary of State, it does not replace your articles of organization, and it does not substitute for licenses you may need - check the North Dakota business license requirements for your activity. It is a private governance contract. If you later wind the company down, the agreement's dissolution terms guide the process; see how to dissolve an LLC in North Dakota. Many owners have a business attorney draft or review the agreement, especially for multi-member companies, to make sure it does what they intend under North Dakota law.

Frequently Asked Questions

Is an operating agreement required for a North Dakota LLC?

No. North Dakota law does not require an LLC to adopt a written operating agreement. It is strongly recommended, however, because the North Dakota Uniform Limited Liability Company Act supplies default rules that govern any matter your agreement leaves unaddressed.

Do I file my operating agreement with the North Dakota Secretary of State?

No. The operating agreement is an internal document. You keep it with your company records; you do not file it with the North Dakota Secretary of State. Only formation documents such as the articles of organization are filed with the state.

Does a single-member North Dakota LLC need an operating agreement?

It is not required, but it is still recommended. A single-member operating agreement documents that the LLC is separate from its owner, which supports the liability shield, and it can specify management, capital, and what happens on the owner's death or incapacity.

What governs a North Dakota LLC without an operating agreement?

The North Dakota Uniform Limited Liability Company Act, N.D. Century Code Chapter 10-32.1, supplies default rules on management, voting, distributions, and dissolution. Those statutory defaults apply to any issue your operating agreement does not cover or does not exist to cover.

Member-managed or manager-managed - which should I choose?

Member-managed means the owners run day-to-day operations; manager-managed means one or more appointed managers do. Most small North Dakota LLCs are member-managed. The operating agreement states which structure applies and defines each person's authority to bind the company.

Can members change a North Dakota operating agreement later?

Yes. Members can amend the operating agreement using the amendment procedure written into it. If the agreement is silent, the statutory default under Chapter 10-32.1 generally requires the consent of all members to amend it. Keep signed, dated copies of every amendment.

Related

• How to form an LLC (cluster hub)
• How to form an LLC in North Dakota
• Single-member LLC in North Dakota
• North Dakota registered agent
• How to get an EIN
• What is a DBA?

Sources

1. North Dakota Legislative Assembly - N.D. Century Code Chapter 10-32.1, Uniform Limited Liability Company Act.
2. North Dakota Legislative Assembly - Chapter 10-32.1 (full text, PDF).
3. North Dakota Secretary of State - Business Services (LLC registration and forms).
4. North Dakota Secretary of State - Business Records Search.
5. North Dakota Office of State Tax Commissioner - Business Taxes.
6. North Dakota Office of State Tax Commissioner - Income Tax Withholding.
7. IRS - Limited Liability Company (LLC).
8. IRS - Single Member Limited Liability Companies.
9. IRS - Partnerships (default multi-member taxation).
10. IRS - Get an Employer Identification Number (free EIN).
11. Cornell Law School Legal Information Institute - Operating agreement (Wex).
12. Cornell Law School Legal Information Institute - Limited liability company (LLC) (Wex).
13. Cornell Law School Legal Information Institute - Fiduciary duty (Wex).
14. Cornell Law School Legal Information Institute - Piercing the corporate veil (Wex).
15. North Dakota Legislative Assembly - Title 10, Corporations (Century Code).

LegalGlass provides general information for educational purposes and is not a law firm or a substitute for advice from a licensed attorney or tax professional. Laws, fees, and thresholds change; verify current requirements with the North Dakota Secretary of State and the North Dakota Office of State Tax Commissioner before acting.