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What should a multi-member LLC operating agreement include in Georgia? A working checklist
Georgia lets LLC members write almost any rules they want, and fills every gap with defaults that rarely match the deal. These eight sections decide who owns, who votes, who pays and how someone leaves.
Responsible attorney: Lou Schwartz, Schwartz & Associates, PC, Atlanta, Georgia. intake@snalawyers.com
Key takeaways
- Georgia gives maximum effect to operating agreements, so the written terms generally control over the statute's defaults [1].
- Without written terms, profits, losses and distributions are split equally regardless of contributions [2] [3].
- By default each member has one vote, and listed major decisions require unanimous consent [4].
- A buyer of a member's interest receives economic rights only and does not become a member without admission [5].
At a glance
- Controls
- The written operating agreement, given maximum effect [1]
- Default voting
- One vote per member; unanimity for listed major decisions [4]
- Default transfer
- Buyer gets economic rights only until admitted as a member [5]
- Cost to form
- $110 to file articles of organization ($100 fee plus $10 service charge) [7]
On this page
Three people form a Georgia LLC to open a restaurant. One provides most of the cash, one signs the lease and runs the kitchen, and one contributes recipes and a brand. Each assumes the others share the same picture of who owns what. A multi-member operating agreement puts that picture in writing. This article walks through what it should cover. For what happens with no agreement at all, see our earlier article on Georgia LLC default rules.
Why does the written agreement matter so much in Georgia?
Because Georgia gives maximum effect to freedom of contract and to the enforceability of operating agreements [1]. The statute supplies defaults only where the agreement is silent, and those defaults split economics equally and give each member one vote, whatever each person contributed [2] [3] [4].
The statute says
“to give maximum effect to the principle of freedom of contract and to the enforceability of operating agreements”
What sections does every multi-member agreement need?
- Ownership and contributions. Record what each member contributed, in cash, property or services, and the percentage interest that results.
- Management and voting. State whether members or managers run the company, how votes are counted and which decisions need a supermajority or unanimous approval. The default is one vote per member [4].
- Capital calls. Say whether members must fund additional capital, how a call is made and what happens to a member who does not fund, such as dilution or a loan from the others.
- Allocations and distributions. Set how profits and losses are allocated and when cash is distributed, including distributions to cover members' income taxes. Without terms, both are equal [2] [3].
- Roles and compensation. Describe who works in the business, whether they are paid separately from distributions and what happens if a working member stops working.
- Duties and conflicts. Address competing businesses and related-party deals. An agreement may adjust 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 [6].
- Transfers and buy-sell. Restrict transfers, add a right of first refusal and set triggers such as death, disability, divorce or departure, with a valuation method and payment terms. By default, a buyer receives economic rights only and does not become a member until admitted [5].
- Deadlock and disputes. Provide a tie-breaking process, such as mediation, a neutral vote or a buy-sell offer, and choose where disputes are resolved.
What do members most often leave out?
Exit terms. Members agree on percentages and forget to say what happens when one wants out, stops working or dies. A buy-sell section with a valuation formula costs little when relationships are good and is hard to negotiate later.
The statute says
“or to become or exercise any rights of a member until admitted as a member”
What should I avoid doing?
- Downloading a single-member template for a company with several owners.
- Recording percentages without saying how they change when someone contributes more.
- Leaving voting at one vote per member when contributions are unequal, unless that is the deal.
- Signing before every member has read the transfer and exit sections.
What if we already formed the LLC?
Adopt an agreement now. Members can sign a written operating agreement at any time, and once signed it generally controls over the defaults [1]. Start by writing down each member's contributions to date.
Use the intake assistant below to describe your members, contributions and goals. 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 kinds of value, when one member is passive, when an investor will join later, when a member is married or lives outside Georgia, or when you are asked to sign an agreement another member's advisor drafted.
What's settled, what depends and what's unclear?
Written terms generally control [1]; the defaults are equal economics, per-member voting and economic-only transfers [2] [3] [4] [5].
How capital calls, distributions and buyout pricing should work for your members' contributions and roles.
Tax allocations depend on the company's federal tax classification; LLCs formed in other states follow their own statutes.
How a court treats informal side agreements that conflict with the signed operating agreement.
Before the LLC takes in money or signs a lease, have every member sign an operating agreement covering ownership, voting, capital, distributions, transfers, exit and deadlock.
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. § 14-11-1107 (freedom of contract)
- 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. § 14-11-502 (assignment of LLC interest)
- 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.