Montana gives LLC members unusual flexibility: an operating agreement does not generally have to be written, but written terms are required to change certain rules on records, distributions, and member admission. Without written terms, Montana also defaults to equal profit and loss sharing after capital contributions are repaid, while member-managed companies give each member equal management rights.
Choose the version that matches your Montana LLC structure.
Is an Operating Agreement Required for a Montana LLC?
No, not for a standard Montana LLC. Montana law allows members to enter into an operating agreement, while the Montana Secretary of State describes the agreement as an internal document that is highly recommended but does not have to be filed with the state.
The document is separate from the Articles of Organization used to create the LLC. Montana currently charges $35 for domestic LLC Articles of Organization, according to the official Montana Business Services filing fee schedule, and formation filings can be submitted through the Montana online business filing portal.
Montana does have an important exception for series of members. If an LLC creates one or more series, its Articles of Organization must set forth a written operating agreement for each series.
The Secretary of State’s own operating agreement guidance for Montana LLCs confirms that ordinary operating agreements remain part of the LLC’s internal records rather than a required state filing.
How Montana Law Defines an Operating Agreement
“Operating agreement” means an agreement, including amendments, as to the conduct of the business and affairs of a limited liability company and the relations among the members, managers, and the company that is binding upon all of the members.
The statutory definition also covers relationships among the members, managers, and the company, and makes the agreement binding on all members.
Montana makes this explicit in § 35-8-109(1): members may enter into an operating agreement that need not be in writing. When the agreement says nothing about an issue, the Montana Limited Liability Company Act supplies the rule.
That flexibility has limits. § 35-8-109(3) requires writing when changing certain statutory rules involving company records, distributions, or admission of members. § 35-8-503 also requires the Articles of Organization or a written operating agreement to replace the equal-sharing default for profits and losses.
Montana defines a manager-managed company as an LLC designated that way in its Articles of Organization. An LLC that is not manager-managed is treated as member-managed. § 35-8-102(20), (22) and § 35-8-202(1)(e).
The Montana Secretary of State’s management guidance also explains the distinction: member-managed LLCs are run by one or more owners, while manager-managed LLCs are run by appointed managers, who may or may not be members.
Montana LLC Default Rules Worth Addressing in Writing
These are the Montana defaults most worth addressing in writing. Several work differently from what owners may expect based only on percentage ownership or the amount each person invested.
In a member-managed LLC, every member has equal management rights. Ordinary business decisions are made by a majority of the members, not automatically by ownership percentage.
§ 35-8-307(1)After liabilities and member capital contributions are accounted for, members share remaining profits, losses, and surplus equally unless the Articles or a written operating agreement provide otherwise.
§ 35-8-503Unless the Articles or agreement change the rule, all members must consent to actions such as amending the operating agreement, admitting a new member, making interim distributions, dissolving, merging, or selling substantially all company property.
§ 35-8-307(3)A buyer or transferee of a member’s economic interest does not automatically become a member or gain management rights. Admission requires authority in a written operating agreement or consent from all other members.
§ 35-8-707Montana permits separate series with different rights and obligations. Written series agreements must be addressed in the Articles, and separate records are required for liabilities to remain limited to a particular series.
§§ 35-8-202, 35-8-304- Montana Code Annotated, Title 35, Chapter 8: Montana Limited Liability Company Act
- Montana Code Annotated § 35-8-109: Effect of Operating Agreement and Nonwaivable Provisions
- Montana Code Annotated § 35-8-307: Management and Voting
- Montana Code Annotated § 35-8-202: Articles of Organization
- Montana Code Annotated § 35-8-503: Sharing of Profits and Losses
