An LLC with two or more members runs on the same gap a handshake partnership does: without an operating agreement, state law decides who is paid, who is bought out, and who can bind the business, and its defaults were written to be fair between strangers rather than useful to any particular pair of owners. New York is unusually direct about this. Its LLC Law says outright that "the members of a limited liability company shall adopt a written operating agreement" within 90 days of filing (section 417). Delaware takes the opposite approach, defining an LLC agreement as something that can be "written, oral or implied" (6 Del. C. §18-101(9)), which sounds permissive until the question is what an oral agreement between two members actually says six months into a dispute.

Either way, the practical answer is the same: write it down. What follows is what the harmonized uniform LLC act decides if the agreement is silent on the two points multi-member LLCs fight over most, and a sample clause for the one provision almost every agreement needs and few include correctly: how cash gets to members in time to pay the tax the LLC's income already created for them. This is general information, not a substitute for a lawyer in the members' state reading the actual agreement.

What the LLC's own state law decides if the agreement says nothing

States that adopted the uniform LLC act, directly or in their own words, settle the two biggest gaps the same way, and both answers surprise members who assume an LLC works like a partnership.

The LLC default versus the partnership default

Question Partnership default (RUPA §401) LLC default under the harmonized uniform act
Can a member leave and be bought out? Yes; a departing partner is owed a buyout price under section 701 No; a member's dissociation "does not entitle the person to a distribution" (section 404(b)). A member who leaves can be stuck holding a stake with no buyer and no right to force one
How are distributions split before dissolution? Equal per partner, regardless of capital, unless agreed otherwise Also equal per member, regardless of capital, unless the operating agreement says otherwise (section 404(a)): the member who put in four times the money gets the same check
Can one owner sign for the business? Yes; any partner is an agent of the firm in the ordinary course (section 301) No, not automatically; a member is not an agent of the LLC "solely by reason of being a member" (section 301(a)). Whether a member can bind the LLC turns on the operating agreement and on ordinary agency law

The no-buyout default is the one that catches members off guard. A minority member in an LLC with no exit clause can find there is no statutory right to be cashed out at all, only a transferable interest in future distributions that the other members control the timing of. That is the single clause an operating agreement most needs to add if the uniform act's defaults are left standing, and it is covered at length in buy-sell agreements for business partners and how to remove a business partner, both of which apply to an LLC's members as much as to a partnership's partners.

Management structure is the other decision every agreement should make explicitly rather than inherit. Most state LLC acts default to member-managed, where every member has a say, unless the operating agreement (or, in some states, the articles of organization) names one or more managers instead; a multi-member LLC that wants a single managing member running day-to-day decisions needs that written down, not assumed.

A tax distribution clause, because the K-1 arrives whether or not the cash does

An LLC taxed as a partnership allocates income to members whether or not it distributes any cash, the same income-versus-cash mismatch that shows up on every partnership K-1. A member can owe real tax in a year the LLC paid out nothing, which is tolerable for a member who expected it and a real problem for one who did not budget for it. The standard fix is a tax distribution clause that requires the LLC to distribute enough cash, ahead of any other distribution, to cover each member's estimated tax on the income allocated to them.

Sample tax distribution clause 
Tax Distributions. No later than the fifteenth day of each month in which a federal estimated tax payment is due for individuals, the Company shall distribute to each Member an amount in cash equal to such Member's Assumed Tax Liability for the relevant period, calculated by multiplying the taxable income allocated to such Member under this Agreement by the Assumed Tax Rate. "Assumed Tax Rate" means the highest marginal combined federal and state individual income tax rate applicable to any Member, as determined in good faith by the Members, taking into account the character of the income allocated (including any applicable rate for qualified business income). Any amount distributed under this Section shall be treated as an advance against, and shall reduce, future distributions otherwise payable to that Member under Section [__] (Distributions).

The clause does two things an agreement without it leaves undone: it ties the distribution to the actual tax impact of the actual allocation, rather than a flat percentage that may be too low in a high-income year, and it credits the tax distribution against future distributions so the member is not paid twice for the same income. The Assumed Tax Rate should be set high enough to cover the highest-bracket member, since paying one member's tax distribution and under-funding another's defeats the purpose.

The rest of what a multi-member LLC's agreement should settle, beyond management and tax distributions, overlaps heavily with what any partnership agreement covers, and what to include in a partnership agreement is the fuller checklist. The choice between an LLC and a general partnership in the first place, including the liability and state-fee differences, is in general partnership vs LLC.

A template you can start from

Download the template as a text file: formation, capital accounts, allocations, a tax distribution clause, the member-managed structure with the manager-managed option noted in brackets, transfer restrictions, withdrawal and buyout, and dissolution, in order. It is general information built from the structure a multi-member operating agreement commonly takes, not a document to sign without a lawyer and a tax adviser, both licensed in the members' state, reading the finished version first.