Utah LLC Operating Agreement: § 48-3a-112 + Free Template (2026)

Utah doesn't require an LLC operating agreement. The catch: § 48-3a-102(16) treats oral, implied, and written agreements as equally binding, so Title 48's defaults fill every gap a silent agreement leaves.

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Single-Member Operating Agreement

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Manager-Managed Operating Agreement

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What Utah law actually says about operating agreements

Utah's LLC statute doesn't make an operating agreement a condition of formation. The Utah Revised Uniform Limited Liability Company Act sits in Title 48, Chapter 3a. To form a Utah LLC, you file a Certificate of Organization with the Utah Department of Commerce, Division of Corporations and Commercial Code. No private contract required.

But the moment any agreement exists between members, Utah Code Ann. § 48-3a-112 controls how it operates. The statute treats the agreement as the governing document for internal affairs: relations among members, rights and duties of managers, and the activities of the LLC itself. Where the agreement says nothing, Title 48 fills the gap.

Utah Code Ann. § 48-3a-102(16): an operating agreement is the agreement of all members, including a sole member, that may be “oral, implied, in a record, or in any combination thereof.”

That definition is the foundation of every default rule below. It's also why Utah ranks among the trickier states for verbal handshake deals between business partners.

The default rules that take over without a written agreement

If a Utah LLC's operating agreement is silent on a topic, Title 48 kicks in. Three defaults catch first-time owners off guard most often: per-capita distributions, equal voting weight regardless of contribution, and the unanimous-consent rule for new members.

Per-capita distributions under § 48-3a-404

Under § 48-3a-404, interim distributions before dissolution must be made in equal shares among current members and any persons dissociated as members, regardless of capital contribution. Capital accounts don't enter the formula. The per-capita rule is the single biggest distribution trap in Utah's statute.

Concrete example: a two-member LLC. One member contributes $90,000, the other $10,000. The OA doesn't address distributions. Under Utah's default, both members are entitled to 50% of every distribution. That adds up fast for the larger contributor.

The fix is a single sentence in the operating agreement specifying that distributions track ownership percentages or capital contributions. Without it, the statute wins.

Equal voting rights and unanimous-consent thresholds under § 48-3a-407

Utah Code § 48-3a-407 gives each member equal voting rights in management. Ordinary-course matters get decided by majority vote. Anything outside the ordinary course, plus any amendment to the operating agreement itself, requires unanimous consent.

Two practical consequences: voting weight isn't tied to ownership percentage unless the OA says so, and a single member can block any major decision in a multi-member LLC. Investors expecting weighted votes need to override the default.

Admission of new members requires unanimous consent

Under § 48-3a-401(3)(c), if the operating agreement is silent, every existing member must agree before a new member joins. One holdout blocks the admission. Most operating agreements override this with a majority or supermajority threshold to keep the LLC functional during ownership changes.

Oral and implied operating agreements: Utah's quiet liability

Utah's definition of operating agreement (oral, implied, in a record, or any combination) creates a problem most other states don't have. A casual conversation, an email exchange, or a repeated payout pattern can become a binding operating agreement in a Utah court, even when nobody signed anything.

Two scenarios show how this happens:

• Email thread example: three founders discuss profit splits in a Slack channel and one writes “let's just do 33/33/34 for now.” No formal agreement is ever drafted. Two years later, one founder argues for 50/25/25 based on workload. Utah courts can treat the original message as an implied operating agreement under § 48-3a-102(16).
• Course-of-dealing example: a two-member LLC pays each owner $5,000 monthly for 18 months without a written distribution clause. One member then unilaterally cuts the other's draw. The 18-month pattern can be treated as an implied agreement, and the unilateral cut may breach it.

The mitigation is straightforward: include an integration clause (sometimes called a merger clause) at the end of the written operating agreement. It states that the document supersedes all prior or contemporaneous oral, written, or implied understandings. Utah-licensed practitioners at firms like Parsons Behle & Latimer recommend explicit integration language for exactly this reason.

Member-managed vs. manager-managed under Utah Code § 48-3a-407

Utah LLCs are member-managed by default. To flip into manager-managed, the operating agreement must use specific trigger language: “manager-managed,” “managed by managers,” “management is vested in managers,” or words of similar import. Naming someone a “manager” without that language doesn't change the structure.

Member-managed default rules

Each member has equal management rights. Ordinary-course decisions go to majority vote. Extraordinary acts (sale of substantially all assets, mergers, dissolution) and OA amendments need unanimous consent. The fiduciary duties of loyalty and care, plus the obligation of good faith and fair dealing, apply to every member acting on behalf of the LLC under § 48-3a-409.

Manager-managed: how authority and fiduciary duties shift

In a manager-managed Utah LLC, day-to-day decisions sit with the designated manager(s). Members still vote on extraordinary acts. The fiduciary duties shift primarily to managers, and members who aren't managers generally don't owe fiduciary duties just by virtue of holding an interest. That makes manager-managed structures attractive for passive investors.

Switching from member-managed to manager-managed (or back) is an OA amendment, so default rules require every member's signature. Plan for this when raising outside capital. Boost Suite's step-by-step Utah LLC formation guide walks through how to flag your management choice on the Certificate of Organization.

Who can bind the LLC: the § 48-3a-301 tension

Most consumer pages skip the agency rule. Worth flagging: under § 48-3a-301, a member is not an agent of the LLC solely by reason of being a member. Even in a member-managed LLC where members run operations, that member doesn't automatically have authority to sign contracts on the LLC's behalf.

Utah law-firm commentary flags this tension between the management default and the agency rule. In practice, every Utah operating agreement should include an authority-and-signature clause that names who can bind the LLC, what dollar threshold triggers co-signature, and how the LLC formally delegates signing power.

What every Utah LLC operating agreement should include

A workable Utah operating agreement covers the items below. Each clause exists to either override a default rule, document an internal arrangement, or protect against the oral-OA risk.

• LLC name, purpose, and principal office: match the name exactly as filed on the Certificate of Organization. If the LLC operates under a DBA (assumed name), list that too. Run Boost Suite's Utah business entity search tool to verify name availability and registration status before signing.
• Member identification and capital contributions: list every member, their address, and what each contributed (cash, property, services).
• Ownership percentages and capital accounts: state each member's ownership percentage clearly, even in a single-member LLC.
• Profit and loss allocation: override the per-capita rule from § 48-3a-404 if distributions should track ownership.
• Distributions and timing: specify when, how, and on what basis distributions get paid.
• Voting rights and decision thresholds: define ordinary-course versus extraordinary acts, and the vote needed for each.
• Management structure and authority to bind: state member-managed or manager-managed using statutory trigger language, then name who can sign for the LLC.
• Admission, withdrawal, and buy-out mechanics: override the default unanimous-consent rule for new members if needed; address valuation on exit.
• Transfer restrictions and right of first refusal: regulate how membership interests can move; the default lets a transferee receive distributions but not management rights.
• Dissolution triggers: sync with the Certificate of Organization (see the 2024 § 48-3a-701 update below).
• Indemnification and advancement of expenses: track § 48-3a-408 and don't try to waive bad-faith conduct.
• Dispute resolution: mediation, arbitration, venue selection (Utah state courts), and attorney-fee shifting.
• Integration / merger clause: the Utah-specific safeguard against oral and implied agreements.
• Amendment procedure: the default is unanimous consent; most OAs lower this to majority or supermajority.

One thing worth flagging: under § 48-3a-112(3)–(4), the operating agreement can't waive the duty of loyalty, the duty of care, or the contractual obligation of good faith and fair dealing. It also can't exonerate a member or manager for bad-faith, willful, or reckless conduct. Any clause that tries gets struck down.

Single-member and multi-member LLCs: same statute, different drafting

Single-member Utah LLCs benefit from a written operating agreement even though the statute expressly accepts an agreement of a sole member. Most Utah banks won't open business accounts without one. Courts look at the document during veil-piercing analysis to see whether the LLC was actually treated as separate from the owner. The agreement also locks in capital contributions and tax elections in writing, so there's a clear paper trail when the IRS asks.

Multi-member LLCs face a different drafting calculus. The per-capita distribution rule, the unanimous-consent default for new members, and the equal-voting default all collide with how investors typically expect things to work.

Two-member LLCs need a tie-breaking mechanism (rotating chair, third-party mediator, or a defined dispute clause), since 50/50 deadlocks are common. Multi-member exit provisions also need to address valuation, payout timing, and what happens if a member dies or becomes incapacitated. Pairing the OA with the right Utah registered agent helps maintain the corporate formalities veil-piercing case law looks for.

Drafting your Utah operating agreement step by step

Drafting from scratch is faster than most owners expect once the framework is clear. The six steps below cover the core sequence Utah practitioners follow for both single-member and multi-member LLCs.

1. Confirm your management structure: pick member-managed or manager-managed before drafting. The OA's exact language is what triggers each. Naming someone “manager” without the right phrasing won't flip the LLC out of the member-managed default.
2. Document capital and ownership: list every member, what they contributed, and their ownership percentage. Override the per-capita rule here if contributions are uneven.
3. Define profit, loss, and distribution rules: specify who gets what and when. Tie distributions to ownership percentage rather than relying on the equal-shares default.
4. Set voting and approval thresholds: define ordinary course versus extraordinary acts. Lower the unanimous-consent threshold for routine actions like admitting new members. Build in tie-breaking for two-member LLCs.
5. Add Utah-specific safeguards: integration clause, dissolution triggers synced with the Certificate of Organization, charging-order language under § 48-3a-503, and a clear authority-to-bind clause to address the § 48-3a-301 tension. This is where you'll spend the most drafting time.
6. Sign, store, and update: every member signs and dates. Keep the executed copy with corporate records, alongside the EIN confirmation letter from the IRS and any DBA filings. Boost Suite's breakdown of what a Utah LLC actually costs to maintain covers the recurring expenses that often trigger OA updates.

Filing context: how Utah's costs and timelines shape your agreement

The operating agreement doesn't get filed with the state, but it interacts with the Certificate of Organization at several points. Knowing the filing environment helps draft an OA that won't conflict with public records.

Source: Utah Division of Corporations current fee schedule (effective July 1, 2025). Boost Suite's deep-dive on Utah LLC processing times broken down by method compares online, mail, and expedited options in detail.

The 2024 amendment to § 48-3a-701 (effective July 1, 2024) changed how dissolution triggers work. Dissolution events can now sit in either the Certificate of Organization or the operating agreement, not just the OA. If the two documents conflict, the LLC has a problem nobody wants to litigate.

When to update or amend your Utah operating agreement

Trigger events for an amendment:

• New member admitted or existing member exits: the ownership table changes, voting math shifts, and capital accounts won't match the original signed copy.
• Capital contribution change or ownership percentage shift: any rebalance needs to be on paper.
• Switch between member-managed and manager-managed: requires updated trigger language and an authority-to-bind revision.
• Material change in profit/loss allocation: if the LLC moves from per-capita to ownership-weighted distributions, or vice versa.
• Tax election change: an S-corp election via IRS Form 2553 or entity classification election via Form 8832 affects how distributions and salaries get treated. Boost Suite's review of vetted Utah LLC formation services covers providers that bundle ongoing tax-election support.
• Statutory change: the 2024 § 48-3a-701 dissolution amendment is a recent example.

Default amendment rule: every member must consent. The OA itself can set a lower threshold (majority or supermajority), which is what most active LLCs end up doing. Don't forget to date the amendment and have all consenting members sign the same document.

Utah LLC operating agreement: answers to common questions

These are the questions that come up most often from Utah LLC owners drafting their first operating agreement. Answers reflect the 2026 fee schedule and the 2024 amendment to Title 48.