If a Georgia LLC has no written operating agreement covering a topic, the LLC Act supplies the rule: the members manage the company, each member gets one vote, profits, losses, and distributions are split equally regardless of who put in more money, and adding a member or dissolving takes unanimous consent. A member of an LLC formed after June 30, 1999 can't simply withdraw, and nothing in the statute guarantees a departing owner a buyout. Most of these defaults can only be changed in writing.
Many small-business owners form an LLC online in an afternoon and never sign an operating agreement. That works fine while everyone agrees. The problems show up later: one owner put in $50,000 and the other put in sweat, a partner wants out, someone dies, or the owners disagree about selling. At that point the company's rules are whatever the Georgia Limited Liability Company Act says by default, and those defaults rarely match what the owners assumed.
This article covers the default rules most likely to matter for a small, owner-run Georgia LLC. It's a starting point for a conversation with counsel, not a substitute for an agreement written for your company.
Oral agreements count, but they can't change most defaults
Georgia defines an operating agreement as "any agreement, written or oral, of the member or members as to the conduct of the business and affairs" of the LLC (O.C.G.A. § 14-11-101). So a handshake deal is technically an operating agreement. The catch is that the statute lets owners override the important defaults (management, voting, profit splits, distributions, admitting members, withdrawal, and fiduciary duties) only through the articles of organization or a written operating agreement. A verbal understanding won't do it.
The default rules that surprise owners most
- Management: the members run the company unless the articles or a written agreement name managers (§ 14-11-304(a)).
- Voting: "each member shall have one vote," and a majority of members decides ordinary matters (§ 14-11-308(a)). Votes are counted per person, not by ownership percentage or money invested.
- Profits and losses: if the documents are silent, they "shall be allocated equally among the members" (§ 14-11-403), whatever each owner contributed.
- Distributions: also "shared equally among the members" (§ 14-11-404), and a member is entitled to distributions before dissolution only as the documents provide or all members approve.
- Big decisions need everyone: by default, dissolving, merging, selling substantially all assets, admitting a new member, amending the agreement, and approving distributions all require unanimous member approval (§ 14-11-308(b)).
When an owner wants out
For an LLC formed on or after July 1, 1999, the statute says "a member may not withdraw from the limited liability company" unless the articles or a written operating agreement allow it (O.C.G.A. § 14-11-601.1). Membership ends only on listed events such as death, bankruptcy, or the company buying out the member's entire interest. Older LLCs follow a different section.
Just as important is what the statute doesn't say: there's no default rule that the company or the other owners must buy out a departing member, or at what price. Without a written buy-sell provision, an owner who wants out and owners who want to keep going can end up stuck with each other or in court. See buy-sell agreements and succession planning and partner and shareholder disputes.
Duties owners owe each other
By default, a member or manager must act in good faith in the LLC's best interests, with the care of an ordinarily prudent person in a similar position (§ 14-11-305). A written operating agreement can expand, restrict, or even eliminate those duties, but it can't excuse intentional misconduct, a knowing violation of law, or taking a personal benefit in breach of a written operating agreement. Owners who also run competing or related businesses should address this in writing.
What a good operating agreement covers
- Who owns what percentage, and whether votes and profits follow ownership instead of the equal-shares default.
- Who manages day to day, what decisions need a vote, and what needs unanimous consent.
- Capital contributions: what each owner put in, and what happens if more money is needed.
- Distributions, including tax distributions so owners can pay tax on profits allocated to them.
- Buy-sell terms: what happens on death, disability, divorce, retirement, or a falling-out, and how the price is set.
- Transfer restrictions, so an owner can't sell to a stranger without the others' consent.
- Deadlock and dispute resolution, such as mediation before litigation.
- Dissolution and winding up. See closing a Georgia business.
Single-member LLCs need one too
Even a one-owner LLC benefits from a written agreement. It documents that the company is a separate entity, which supports the liability shield (see piercing the corporate veil). It can also name who steps in to run or wind up the business if the owner dies or becomes incapacitated, which the statute doesn't handle smoothly. Banks and lenders often ask for one too.
Georgia LLC default rules at a glance
| Topic | Default if no written agreement | Law |
|---|---|---|
| Who manages | The members | O.C.G.A. § 14-11-304(a) |
| Voting | One vote per member; majority decides | O.C.G.A. § 14-11-308(a) |
| Profits and losses | Split equally among members | O.C.G.A. § 14-11-403 |
| Distributions | Shared equally among members | O.C.G.A. § 14-11-404 |
| Admitting a new member | Consent of all members | O.C.G.A. § 14-11-505(b) |
| Withdrawing (LLCs formed on or after July 1, 1999) | Not allowed unless the documents permit it | O.C.G.A. § 14-11-601.1 |
Frequently Asked Questions
Is an operating agreement required in Georgia?
Georgia doesn't require you to file one, and an oral agreement counts as an operating agreement. But most of the LLC Act's default rules can only be changed by the articles or a written operating agreement, so without one the statute's defaults govern.
How are profits split in a Georgia LLC without an operating agreement?
Equally among the members, regardless of how much each contributed (O.C.G.A. § 14-11-403). Distributions are also shared equally by default (§ 14-11-404).
Can a member leave a Georgia LLC whenever they want?
For LLCs formed on or after July 1, 1999, a member may not withdraw unless the articles or a written operating agreement allow it (O.C.G.A. § 14-11-601.1). The statute also doesn't guarantee a buyout, which is why buy-sell terms matter.
Does my single-member LLC need an operating agreement?
It isn't filed with the state, but it's strongly recommended. It helps show the company is separate from you and can say who takes over if you die or can't run the business.
Sources
- O.C.G.A. § 14-11-101 (definitions)
- O.C.G.A. § 14-11-304 (management)
- O.C.G.A. § 14-11-305 (duties of members and managers)
- O.C.G.A. § 14-11-308 (voting)
- O.C.G.A. § 14-11-403 (allocation of profits and losses)
- O.C.G.A. § 14-11-404 (distributions)
- O.C.G.A. § 14-11-505 (admission of members)
- O.C.G.A. § 14-11-601.1 (withdrawal, LLCs formed on or after July 1, 1999)
This guide is general information about Georgia law as of October 30, 2026. It is not legal advice, and reading it does not create an attorney-client relationship. Laws change and every case turns on its own facts. Talk to a lawyer about your situation before you rely on a deadline or rule described here.