A Michigan LLC operating agreement is the written document that sets ownership percentages, voting rules, and profit-sharing terms for your limited liability company. Michigan is stricter than most states here: under MCL 450.4102(r), this agreement must be in writing.
Choose the version that matches your Michigan LLC structure.
Is an Operating Agreement Required in Michigan?
No. Michigan forms a domestic LLC by filing Articles of Organization, Form CSCL/CD-700, rather than an operating agreement. The current state form has a $50 nonrefundable filing fee, and Michigan guidance confirms that LLC governance may be set through the Articles of Organization or an operating agreement.
For formation details, see Michigan LARA’s LLC guidance and the official CSCL/CD-700 Articles of Organization form.
Michigan does make one important distinction once an operating agreement exists: the statutory definition calls for a written agreement. The LLC Act does not add a notarization requirement, and a single-member agreement is not unenforceable merely because only one person is a party.
Michigan government guidance also expressly notes that operating agreements are not filed with the Corporations Division.
How Michigan Law Defines an Operating Agreement
“Operating agreement” means a written agreement by the member of a limited liability company that has 1 member, or between all of the members of a limited liability company that has more than 1 member, pertaining to the affairs of the limited liability company and the conduct of its business. The term includes any provision in the articles of organization pertaining to the affairs of the limited liability company and the conduct of its business.
Michigan treats the operating agreement as a written governance document. For a multi-member LLC, the statutory definition refers to an agreement between all members, while relevant governance provisions in the Articles of Organization can also form part of the operating agreement.
Michigan’s statutory definition specifically uses a written agreement. That makes the form requirement materially different from states that recognize oral or implied operating agreements.
A governance provision placed in the Articles of Organization can fall within Michigan’s definition of the operating agreement.
Under MCL § 450.4214, if the operating agreement and Articles of Organization disagree, the Articles control. That makes it especially important to keep the management structure and other overlapping provisions consistent.
Michigan’s own summary of prior LLC Act changes also highlights the state’s recognition of single-member operating agreements and its rule that manager-management must be designated in the Articles.
Michigan LLC Rules That Apply Without an Agreement
Michigan’s fallback rules can produce unexpected results for LLCs that think in ownership percentages. In particular, voting and distributions are not automatically proportional to how much each member invested.
The LLC is member-managed unless its Articles of Organization say the business is managed by one or more managers. The operating agreement can adjust management rights, but manager-managed status must be stated in the Articles.
§ 450.4401; § 450.4203For modern Michigan LLCs, each member gets one vote if the operating agreement does not allocate voting rights differently. A larger capital contribution does not automatically create more votes.
§ 450.4502If the agreement does not set an allocation, distributions are divided equally among members, rather than automatically by contribution or ownership percentage.
§ 450.4303If the agreement says nothing about a member’s right to receive a distribution before withdrawal or dissolution, that distribution requires unanimous member approval.
§ 450.4304A person acquiring an interest directly from the LLC generally needs unanimous approval if the operating agreement provides no admission rule. An assignee in a multi-member LLC likewise needs a unanimous vote to become a member unless the agreement says otherwise.
§§ 450.4501, 450.4506A member may withdraw only when the operating agreement allows it. Expulsion also depends on a provision in the operating agreement.
§ 450.4509If the Articles of Organization and operating agreement conflict, the Articles control.
§ 450.4214This is why a Michigan agreement should not simply list ownership percentages. If members want voting power and economic rights to track those percentages, the document should say so expressly.
