Attorney advertisingAnalysisCorporate & Governance
Starting a Georgia LLC with a partner? What happens if you skip the operating agreement
Without a written operating agreement, Georgia law splits profits and distributions equally and gives each member one vote, whatever each person invested. Here is what the default rules say and what to put in writing.
Responsible attorney: Lou Schwartz, Schwartz & Associates, PC, Atlanta, Georgia. intake@snalawyers.com
Key takeaways
- Absent a written agreement, a Georgia LLC allocates profits and losses equally among members [1].
- Distributions are also shared equally by default [2].
- Members vote one per person, by majority in number, and several major decisions require unanimous consent [3].
- Georgia gives operating agreements maximum effect, so the agreement you sign generally controls [4].
At a glance
On this page
Two founders form a Georgia LLC. One puts in $90,000 and the other puts in $10,000 and runs the business. Neither signs an operating agreement, because the state filing seemed like enough. This article explains what Georgia law does in that situation and what a written agreement should cover.
What are the default rules?
When the articles of organization and a written operating agreement are silent, Georgia law splits profits and losses equally among the members [1]. The statute says profits and losses "shall be allocated equally among the members" [1]. Distributions follow the same equal default [2].
The statute says
“profits and losses, and each item thereof, shall be allocated equally among the members.”
How do members vote without an agreement?
Each member has one vote, and a majority in number decides matters relating to the company's business [3]. Ownership percentage does not control the vote by default. Several decisions require unanimous consent unless the documents say otherwise, including dissolution, a merger, a sale of all or substantially all assets, admitting a new member, amending the operating agreement and approving a distribution [3].
What can a written operating agreement change?
Almost all of it. Georgia's stated policy is to give maximum effect to freedom of contract and to the enforceability of operating agreements [4]. An agreement may also expand, restrict or eliminate members' fiduciary duties, but it may not limit liability for intentional misconduct, a knowing violation of law, or a personal benefit received in breach of the written agreement [5].
The statute says
“to give maximum effect to the principle of freedom of contract and to the enforceability of operating agreements”
Terms most multi-member agreements address:
- Ownership percentages and how they relate to capital contributed.
- Voting thresholds and which decisions need everyone's approval.
- Capital calls and what happens if a member does not fund one.
- Distributions, including distributions to cover members' income taxes.
- Transfers, a right of first refusal and buy-sell triggers such as death, disability or departure.
- A deadlock procedure and how disputes are resolved.
What does it cost to form and keep a Georgia LLC?
Filing articles of organization costs $110, a $100 fee plus a $10 service charge [6]. Every Georgia LLC must then file an annual registration between Jan. 1 and April 1, for $60 [7]. A late annual registration adds a $25 penalty [6]. An operating agreement is not filed with the state, so it carries no state fee.
What should I avoid doing?
- Relying on the state filing alone. The articles of organization rarely address economics or exit.
- Treating a spreadsheet or email thread as the agreement without confirming every member agreed to it in writing.
- Making unequal contributions without recording how they affect ownership.
How do I protect my position?
- Write down what each member contributed and when.
- Agree in writing on percentages, voting and distributions before the business takes in revenue.
- Add buy-sell and deadlock terms while relationships are good.
- Revisit the agreement when a member joins, leaves or changes role.
Use the intake assistant below to describe your company and what you need. An attorney at the firm reviews every request before any document is prepared.
Ask the firm about this
The firm's intake assistant is AI, not a lawyer. It asks a few routing questions and the names needed for a conflict check. Keep the details of your situation for the attorney. An attorney at the firm reviews every request.
When does it make sense to talk to a lawyer?
When members contribute different amounts or different kinds of value, when one member will not work in the business, when a member is married or lives outside Georgia, or when you are asked to sign an agreement someone else drafted.
What's settled, what depends and what's unclear?
Without a written agreement, profits, losses and distributions are shared equally, and voting is one vote per member [1] [2] [3].
Whether an email exchange, term sheet or spreadsheet counts as the members' written agreement.
LLCs organized in other states follow their own state's statute; tax treatment depends on the company's classification.
How a court reads a partial or unsigned draft that members followed in practice.
If you are forming a Georgia LLC with another person, put ownership, voting, capital calls, distributions and exit terms in a signed operating agreement before money changes hands.
How was this article prepared?
It was drafted with AI assistance from the primary sources listed below, then reviewed, edited and approved by Lou Schwartz, the responsible attorney, on the review date shown. Each source was checked on the date listed beside it. The article is general information about Georgia law, not legal advice, and reading it does not create an attorney-client relationship.
Sources
- O.C.G.A. § 14-11-403 (allocation of profits and losses)
- O.C.G.A. § 14-11-404 (distributions)
- O.C.G.A. § 14-11-308 (voting)
- O.C.G.A. § 14-11-1107 (freedom of contract)
- O.C.G.A. § 14-11-305 (duties of members and managers)
- Georgia Secretary of State, Corporations Division Filing Fees (effective Sept. 6, 2025)
- Georgia Secretary of State, How to Guide: Register a Domestic Entity
How we write and review
- The issue and the stakes appear within the first 100 words, followed by the law the piece covers.
- Every heading is a question a reader would ask.
- Every legal statement cites a primary source checked on the update date.
- Examples are labeled hypotheticals. No testimonials, case results or outcome promises.
- An attorney at the firm reviews and approves every Analysis piece before it is published.
General information, not legal advice. Reading this article or using the intake assistant does not create an attorney-client relationship.