Why a Louisiana Operating Agreement Matters
Louisiana is the only American state whose private law grows from the civil law rather than the English common law, and its Limited Liability Company Law shows it. La. R.S. 12:1303 gives an LLC the powers of a corporation under the Business Corporation Law and of a partnership under the Louisiana Civil Code, which is a sentence no other state could write. Concepts that founders bring from elsewhere, including free withdrawal, heirs inheriting a seat at the table and a purely contractual view of duty, all behave differently here.
Nothing in the chapter requires a company to adopt an operating agreement, with one important qualification below. The Secretary of State registers the company through GeauxBiz, keeps the articles of organization and the initial report, and takes the annual report. It has no form for an operating agreement, no place to file one and no fee for one. The agreement is private permanently.
The qualification is in the definition. La. R.S. 12:1301 defines an operating agreement as any agreement, written or oral, of the members, or, in the case of a limited liability company having a single member, any written agreement between the member and the company memorializing its affairs and the conduct of its business. A Louisiana single-member LLC therefore cannot have an oral operating agreement. If it is not written, there is no operating agreement, and every default in the chapter applies without exception.
The phrase to watch is "written operating agreement"
Read the chapter and one construction repeats. Interim distributions are allocated as provided in a written operating agreement, and to the extent it does not so provide in writing, made equally to the members, under La. R.S. 12:1324(B). Withdrawal terms are set by a written operating agreement under 12:1325(B). Limits on personal liability and indemnification require the articles or a written operating agreement under 12:1315(A). An assignee becomes a member only on unanimous written consent unless the articles or a written operating agreement provide otherwise, under 12:1332(A).
Louisiana will accept an oral agreement among members in principle and then decline to give it effect in most of the places where members actually fight. Treat writing as compulsory.
The single-member rule that has no equivalent elsewhere
Because 12:1301 requires a written agreement between the member and the company for a single-member LLC, a sole owner in Louisiana has a statutory reason to sign one, not merely a commercial one. It also happens to be the document a New Orleans or Baton Rouge bank asks for at account opening and a lender asks for before it accepts a pledge of company assets.
La. R.S. 12:1320 is the other half of the story. Subsection (A) says the liability of members, managers, employees and agents shall at all times be determined solely and exclusively by the provisions of this Chapter, which is unusually restrictive language. Subsection (D) then preserves claims against a member personally for fraud, for breach of a professional duty, or for another negligent or wrongful act. The shield in Louisiana is statutory and narrow rather than equitable and elastic, and the operating agreement is where a sole owner shows the company was real. Background sits in the single-member LLC guide and the Louisiana single-member LLC page.
What the Louisiana Chapter Decides for a Silent Company
| Question | Louisiana answer with no written agreement | Statute |
|---|---|---|
| Who manages | The members, unless the articles of organization name managers | 12:1311, 12:1312 |
| Voting | One vote per member, majority carries | 12:1318 |
| Interim distributions | Made equally to the members | 12:1324(B) |
| Withdrawal | Thirty days written notice, then fair market value | 12:1325 |
| Death | Membership ceases; the succession representative is an assignee | 12:1333 |
| Personal creditor | Charging order giving assignee rights only | 12:1331 |
Managers belong in the articles, not the agreement
La. R.S. 12:1311 provides that except as otherwise provided in the articles of organization, the business of the company shall be managed by the members, subject to any provision in a written operating agreement restricting or enlarging management rights. La. R.S. 12:1312 then says the articles of organization may provide that the business shall be managed by one or more managers. The articles are the operative document for the manager question. A Louisiana company that appoints a manager internally and never amends its articles is still member managed as against the outside world, and the fix is an amendment to the articles.
Thirty days notice and a fair market value check
This is the most expensive default in the chapter. Under La. R.S. 12:1325(B), where the company was not entered into for a term and a written operating agreement does not specify when a member may withdraw, a member may resign on not less than thirty days prior written notice to the company at its registered office and to each member and manager. Subsection (C) then entitles the withdrawing member, absent a written operating agreement providing otherwise, to receive within a reasonable time the fair market value of their interest as of the date of withdrawal.
A company organized for a term is different: under 12:1325(A) a member may withdraw before the term expires only for just cause arising out of another member's failure to perform an obligation. Most Louisiana LLCs are not organized for a term, so most of them carry a thirty day exit and a fair market value obligation nobody planned for.
Death, succession and the assignee who cannot vote
La. R.S. 12:1333 provides that except as otherwise provided in the articles, a written operating agreement or R.S. 12:1333.1, when an individual member dies or is judicially declared incompetent, the member's membership ceases and the executor, administrator, guardian, conservator or other legal representative is treated as an assignee of the interest. Under 12:1332(A) an assignee becomes a member only with the unanimous written consent of the other members.
Louisiana adds a further layer. It is a community property state: Civil Code article 2338 classifies property acquired during the legal regime through the effort, skill or industry of either spouse as community property. A membership interest built up during a marriage is therefore not automatically the separate property of the member whose name is on it, and a divorce or a succession can put a spouse or heirs into the ownership chain of a business they have never worked in. A written agreement dealing with transfers on death and divorce is not optional planning in Louisiana; it is the only thing standing between the company and its members' family law.
What Belongs in a Louisiana Operating Agreement
Louisiana operating agreement at a glance
| Item | Position in Louisiana |
|---|---|
| Required by state law | No, though a single-member company needs a written one to have an agreement at all |
| Format | Write it. Most operative sections defer only to a written agreement |
| Filed with the Secretary of State | No, and no fee, because there is no filing |
| Governing law | Louisiana Limited Liability Company Law, La. R.S. 12:1301 and following |
| File.Business drafting | $99 flat |
Ten provisions carry a Louisiana company through what actually happens to it.
1. Members and percentage interests
Name each member and set percentages. Louisiana counts votes by head under 12:1318, so the percentage only means something if the agreement says it does.
2. Contributions and capital calls
Record contributions and agreed values, and state whether further contributions can be demanded and what dilution follows a refusal.
3. Management, with the articles to match
If managers will run the company, the articles of organization must say so under 12:1312. The agreement then sets authority, term and removal.
4. Vote measurement and the 12:1318 list
Decide whether votes should follow capital instead of heads, and revisit the matters La. R.S. 12:1318 sends to a majority vote.
5. Allocations and a distribution schedule
Replace the equal distribution rule in 12:1324(B) with your real split, add a reserve and include a tax distribution for pass-through liabilities.
6. Transfer terms, divorce and succession
Set who may assign and on what terms, and address community property, divorce and death expressly rather than leaving them to the Civil Code.
7. Withdrawal terms that replace fair market value
This clause pays for the whole document. Fix when a member may withdraw, how the interest is valued and over how long it is paid.
8. Dissolution triggers and the payment order
Say what dissolves the company and how creditors and members are paid. Louisiana dissolution covers the public side.
9. Federal classification and control of it
Record the classification and the consent needed to change it. The IRS rules for LLCs follow the election, not the state record.
10. Amendments, conflicts and deadlock
Amending the agreement is a majority vote matter under 12:1318. Set the threshold you want and add a deadlock mechanism and a conflicts procedure.
Form your LLC
If you would rather not do this yourself, we prepare the articles, check name availability with the state, and file it for you. Or keep reading and file it on your own. This guide covers everything you need either way.
What a Louisiana Creditor Gets, and What the Statute Omits
La. R.S. 12:1331 is three sentences. On application by a judgment creditor of a member, the court may charge the membership interest with payment of the unsatisfied amount of the judgment with interest. To the extent charged, the creditor has only the rights of an assignee of the membership interest. The chapter does not deprive a member of the benefit of any exemption laws applicable to the interest.
What is missing is as important as what is there. Louisiana does not say the charging order is the exclusive remedy, as Kansas, Idaho, Iowa, Illinois, Hawaii and Maine each do. It also says nothing about foreclosure, in either direction. Owners who were told that a Louisiana LLC delivers the same creditor protection as a Kansas one are relying on words their statute does not contain.
Where that leaves a single-member company
The section makes no distinction by member count, so the same three sentences apply to a one-member LLC. The economic reality diverges, because an assignee of the only member's interest receives everything the company distributes and there is no second member whose vote could hold distributions back. Combined with the narrow statutory shield in 12:1320, a Louisiana single-member LLC is a reasonable liability container and a weak asset-protection instrument. Keep the entity in order regardless, which a certificate of good standing demonstrates.
A Fiduciary Relationship the Agreement Cannot Delete
This is where Louisiana parts company with the contractarian states most decisively. La. R.S. 12:1314(A)(1) provides that a member, where management is reserved to the members, or a manager where management is vested in managers, shall be deemed to stand in a fiduciary relationship to the company and its members, and shall discharge his duties in good faith, with the diligence, care, judgment and skill which an ordinary prudent person in a like position would exercise under similar circumstances. That is a status imposed by statute, not a term the members negotiate.
Subsection (A)(5) is sharper still. A member or manager must account to the company and hold as trustee for it any profit or benefit derived, without the informed consent of a majority of the uninterested members under 12:1318(C), from any transaction connected with the conduct or winding up of the business or from any personal use of company property, unless he proves under strict judicial scrutiny the fairness of the transaction to the company. Few states put the phrase strict judicial scrutiny into their LLC act.
What the agreement can do is limit exposure rather than duty. La. R.S. 12:1314(B) already provides that a member or manager is not personally liable for monetary damages unless he acted in a grossly negligent manner, defined in subsection (C) as a reckless disregard of or carelessness amounting to indifference to the best interests of the company or its members. Subsection (D) adds a business judgment safe harbour for a decision made in good faith without a conflict, on an informed basis and with a rational belief that it serves the company. And La. R.S. 12:1315(A) lets the articles or a written operating agreement eliminate or limit personal liability for monetary damages for breach of any duty under 12:1314 and provide indemnification. Subsection (B) draws the line: no such provision may cover the amount of a financial benefit to which the person was not entitled, or an intentional violation of a criminal law. In Kansas you can delete the duty. In Louisiana you can only soften the consequence.
Three Louisiana Companies and the Article That Applied
Example one: thirty days notice and an unaffordable check
Bayou Fabrication LLC in Houma was formed with three members and no written operating agreement, and its articles set no term. In 2025 one member sent written notice and withdrew thirty days later. La. R.S. 12:1325(C) entitled him to the fair market value of his interest as of the withdrawal date, within a reasonable time. An appraisal put enterprise value at $840,000, so a one-third interest came to roughly $280,000 against $63,000 of cash on hand. The company sold a press to fund it. A written formula and a five-year note would have avoided the sale entirely.
Example two: the equal split nobody agreed to
Two members opened a Lafayette catering business with $175,000 from one and $20,000 plus full-time work from the other, intending 65/35. Nothing was written. La. R.S. 12:1324(B) made interim distributions equal to the members, so a $150,000 distribution year was split $75,000 each. The funding member was $22,500 short of the intended figure in year one and $67,500 across three years before either of them looked at the statute.
Example three: a succession, a spouse and a stalled company
A Shreveport insurance brokerage had two members, both married, and no written agreement. When one died, La. R.S. 12:1333 ended his membership and made his succession representative an assignee. The interest had been built during the marriage, so Civil Code article 2338 put a community property claim in the middle of the negotiation. The surviving member could not admit anyone without unanimous written consent under 12:1332, could not force a sale, and could not remove an assignee entitled to a share of distributions. Eighteen months and about $70,000 in combined legal and appraisal costs later they reached a buyout. A succession clause with insurance funding was the cheaper version.
Five Mistakes Louisiana LLCs Keep Making
Mistake 1: a template written for common law states
National forms do not price the withdrawal right in 12:1325, do not put managers in the articles and do not mention succession or community property.
Mistake 2: a sole owner relying on an unwritten understanding
La. R.S. 12:1301 recognizes no oral operating agreement for a single-member company. Without a written one there is no agreement at all.
Mistake 3: never revisiting it after a marriage, birth or buy-in
Louisiana succession and community property rules move ownership in ways the original document may not contemplate. Review it when the family changes, not only when the business does.
Mistake 4: trying to file it through GeauxBiz
There is no field and no fee. What the state takes is the articles of organization, the initial report and the annual report.
Mistake 5: letting the articles and the agreement disagree
Manager authority and liability limits both run through the articles in Louisiana. Keep them consistent, along with the registered agent record and any agent change.
What Happens When Title 12 Chapter 22 Supplies the Terms
Louisiana charges no penalty for the absence of an operating agreement and the Secretary of State never asks for one. Every figure below is the price of a default or of the dispute it produced.
The Houma fabricator owed roughly $280,000 on thirty days notice because 12:1325 sets the exit price at fair market value. The Lafayette caterers misallocated $67,500 over three years because 12:1324(B) divides distributions equally. The Shreveport succession consumed about $70,000 in professional costs and eighteen months because nobody had written a transfer clause.
Where members litigate, the ordinary commercial numbers apply. A contested Louisiana dispute that reaches discovery and a valuation contest commonly runs past $75,000 per side in legal fees, and each side generally engages its own appraiser, which for a small operating company costs roughly $10,000 to $25,000. A fairness defense under 12:1314(A)(5) is more expensive still, because the burden of proving fairness under strict judicial scrutiny sits with the member who took the benefit.
Ordinary friction lands first. Banks decline accounts where nobody can prove signing authority. Lenders discount. Buyers hold back part of the price. And a company distracted by an internal fight misses its annual report and pays for reinstatement.
How File.Business Drafts Louisiana Operating Agreements
We draft to La. R.S. 12:1301 and following, in writing, because Louisiana gives an unwritten agreement very little to do. The intake covers members and percentages, contributions and agreed values, management with the matching articles language, vote measurement in place of the head count in 12:1318, a withdrawal clause that replaces the fair market value default in 12:1325, succession and community property terms, transfer and admission consent, indemnification under 12:1315, and the federal tax election. Companies trading outside Louisiana get the agreement aligned with their foreign qualification, and trade names through trade name registration.
Templates against drafted agreements
A national template is the wrong instrument in a civil law state. It will not price the withdrawal right, will not send manager authority to the articles and will not address succession or community property. General principles are in operating agreement essentials; the Louisiana adjustments are what a form cannot supply.
Louisiana Operating Agreement FAQ
Does Louisiana require an LLC to have an operating agreement?
Not in general. There is one structural exception: La. R.S. 12:1301 defines an operating agreement for a single-member company as a written agreement between the member and the company, so a sole owner with nothing in writing has no operating agreement at all and every statutory default applies.
Can a Louisiana operating agreement be oral?
Among members of a multi-member company, yes in principle. In practice it achieves very little, because the sections on distributions, withdrawal, indemnification and admission of assignees each defer only to a written operating agreement.
Is the operating agreement filed with the Louisiana Secretary of State?
No. GeauxBiz has no form for it and no fee attaches to it, because it is an internal contract. The public filings are the articles of organization, the initial report and the annual report.
What happens if a member of a Louisiana LLC wants to leave?
If the company was not entered into for a term and no written operating agreement says otherwise, La. R.S. 12:1325(B) lets the member resign on not less than thirty days prior written notice, and subsection (C) entitles that member to the fair market value of the interest as of the withdrawal date, payable within a reasonable time.
How are distributions split in a Louisiana LLC with no written agreement?
Equally. La. R.S. 12:1324(B) allocates interim distributions as a written operating agreement provides, and to the extent it does not so provide in writing, distributions are made equally to the members regardless of what each contributed.
Can a Louisiana operating agreement waive fiduciary duties?
No. La. R.S. 12:1314(A)(1) deems a managing member or manager to stand in a fiduciary relationship to the company and its members. What La. R.S. 12:1315 permits is limiting personal liability for monetary damages and providing indemnification, and even that cannot cover a financial benefit to which the person was not entitled or an intentional violation of a criminal law.
Can File.Business draft a Louisiana operating agreement?
Yes, at $99 flat, with a formation or for an existing company. The draft replaces the fair market value withdrawal default, sets allocations and distribution timing, addresses succession and community property, and aligns manager authority with the articles of organization.
Need a custom Louisiana Operating Agreement?
File.Business drafts Louisiana-specific Operating Agreements at $99 flat: customized for single-member or multi-member structure, ownership percentages, capital contributions, tax election preferences, and management structure. Includes member-signature template and document-vault storage.
Doing this in Louisiana specifically: Louisiana operating agreement covers the clause list, the Title 12 defaults each clause replaces and the succession terms a civil law state needs. Nothing about it is filed with the Secretary of State and no state fee applies.
This guide is written from the official sources below. Fees, forms, and deadlines change; confirm the current requirement with the agency before you file.
Disclosure. File.Business is a private filing service, not a government agency and not a law firm. We prepare and submit filings at your direction, and nothing on this page is legal or tax advice. Filing fees, deadlines, and statutory references are current as of the last-updated date shown above and can change. Confirm current requirements with the relevant state agency before you file.
