Texas LLC Operating Agreement

While Texas doesn't mandate an operating agreement by law, having one is strongly recommended for every LLC. An operating agreement establishes your LLC's internal rules, protects your personal assets, and is typically required by banks for opening business accounts.

Texas has no personal state income tax, making it attractive for LLC formation. However, Texas does impose a franchise tax (also called margin tax) on most LLCs based on their revenue. Small businesses with revenue under $2.47 million (as of 2024) may be exempt.

Texas charges a franchise tax based on your LLC's margin (revenue minus certain deductions). The rate is 0.375% for retail and wholesale businesses, and 0.75% for other businesses. LLCs with revenue under the no-tax-due threshold file but owe $0.

Yes. Our operating agreements are accepted by major financial institutions including Mercury, Chase, Bank of America, and others. The document includes all standard provisions banks look for: member information, ownership structure, and authorization for banking activities. Thousands of our clients have successfully used our agreements to open US bank accounts.

Yes, operating agreements can be amended at any time with the consent of members as specified in the original agreement (typically majority or unanimous approval). Common reasons for amendments include adding or removing members, changing ownership percentages, modifying profit distributions, or updating management structure.

In a member-managed LLC, all members participate in daily business decisions. In a manager-managed LLC, designated managers (who may or may not be members) handle operations while other members are passive investors. Our operating agreement lets you choose either structure and clearly defines the rights and responsibilities of each role.