Vermont doesn’t force any LLC to sign an operating agreement. But 11 V.S.A. Chapter 25 fills every gap with default rules, and several of them surprise first-time owners. A written operating agreement is how owners take control before defaults bite.
Choose the version that matches your Vermont LLC structure.
Does Vermont Require an LLC Operating Agreement?
No. Vermont creates an LLC through Articles of Organization, not through an operating agreement. The company generally comes into existence when the Articles of Organization are filed with the Secretary of State, unless a delayed effective date is specified.
The agreement still matters because Vermont Chapter 25 supplies the rules wherever the members have not made their own permitted arrangements. That can affect control, voting, distributions, manager removal, and what happens when somebody leaves. See the Vermont LLC formation statute for the state’s formation rule.
How Vermont Law Defines an Operating Agreement
“Operating agreement” means any form of description of membership rights and obligations under section 4003 of this title, stored or depicted in any tangible or electronic medium, which is agreed to by the members, including amendments to the agreement.
Vermont’s definition focuses on the members’ agreed terms and the medium in which those terms are kept. § 4003 then gives the operating agreement broad control over the LLC’s affairs, business, and member and manager relationships, subject to statutory limits that cannot simply be waived.
The agreement may be stored or depicted in a tangible or electronic medium. Vermont does not define it as one particular state form.
§ 4003(i) provides that a person who becomes a member is deemed to assent to the operating agreement. The statute therefore treats admission as a member as assent to the existing agreement.
Vermont makes the company’s position explicit in § 4003(h): the LLC is bound by and may enforce its operating agreement whether or not the company itself separately manifested assent to it.
Vermont LLC Rules That Apply If Your Agreement Says Nothing
Vermont’s defaults reach beyond basic management. They can determine who gets a vote, how money is divided, whether a manager can be removed, and whether a departing member receives any immediate payout.
The LLC is member-managed unless the agreement expressly makes it manager-managed. In a member-managed company, every member has equal management rights and most company matters are decided by a majority of the members.
§ 4054(a)-(b)In a manager-managed LLC, a majority of the members may remove a manager at any time, without notice or cause.
§ 4054(c)(4)Profits, losses, and pre-dissolution distributions follow the agreed value of each member’s contributions, as reflected in the LLC’s records. They do not automatically follow equal management rights.
§ 4055(a)-(b)Unless the agreement changes the rule, all members must consent to matters including amending the agreement, admitting a new member, making interim distributions, and selling substantially all company property.
§ 4054(d)A member has the power to dissociate at any time, but a wrongful departure can create liability for damages. Dissociation by itself does not give the former member a right to an immediate distribution.
§§ 4082, 4055(c)A member has no default right to compensation for services to the LLC, even when serving as a manager, except for reasonable compensation for winding up the company.
§ 4060(e)The exit rule is especially worth addressing in writing. Vermont expressly gives a member the power to leave, but the departure may still be wrongful and create a damages claim. The statute also separates dissociation from an automatic payout. See Vermont’s member dissociation rule.
