Do You Need an Operating Agreement for a Single-Member LLC in New Jersey?

If you formed a single-member LLC in New Jersey, you may be asking:

“Do I need an operating agreement for a single-member LLC in NJ?”

The short answer:

New Jersey does not require a written operating agreement — even for a single-member LLC.

However, not having one can create serious legal, financial, and succession risks.

Let’s break this down clearly.

What Does New Jersey Law Say About Operating Agreements?

Under the New Jersey Revised Uniform Limited Liability Company Act (N.J.S.A. 42:2C-2 and 42:2C-11), an “operating agreement” may be:

• Written
• Oral
• Implied
• Or a combination of these

That means:

• You do not file it with the State of New Jersey
• You are not required to submit it when forming your LLC
• The law does not mandate a written operating agreement

But here’s the critical part:

If you do not create your own written operating agreement, New Jersey’s default statutory rules govern your LLC.

And those default rules may not reflect what you want.

Why You Still Need an Operating Agreement for a Single-Member LLC in NJ

Even though a written operating agreement is not legally required, it is strongly recommended.

Here’s why.

1. You Control the Rules — Not the Default Statute

Without a written operating agreement:

• The statute determines management authority
• The statute determines succession rules
• The statute fills in gaps you may not have considered

With a written operating agreement, you define:

• Who runs the company if you become incapacitated
• Whether your LLC continues after your death
• How your ownership interest transfers
• How profits are handled
• Whether you elect S-Corp taxation

Clarity now prevents litigation later.

2. What Happens to a Single-Member LLC If the Owner Dies?

This is one of the most searched questions in New Jersey business law.

If you die:

• Your LLC interest becomes part of your estate
• Your executor may step in temporarily
• But authority and continuation may become unclear without written direction

Without an operating agreement coordinated with your estate plan, your business can become:

• Frozen
• Disrupted
• Or tied up in probate

If your LLC generates income, that disruption can impact your family immediately.

3. Does a Single-Member LLC Protect You Without an Operating Agreement?

Technically, yes — your LLC exists once properly formed.

But courts examine whether you treat the LLC as a separate legal entity.

A written operating agreement strengthens your position by showing:

• Proper business structure
• Separation between personal and business affairs
• Intent to operate formally

It is one more layer reinforcing your liability shield.

4. Do Banks in New Jersey Require an Operating Agreement?

This varies by institution.

Some banks open LLC accounts with:

• Certificate of Formation
• EIN
• Valid identification

Other banks may request a written operating agreement depending on internal policy.

Even when not required at account opening, lenders often request it later for:

• Lines of credit
• Business loans
• Financing applications

Having one prepared avoids delays.

What Happens If You Don’t Have an Operating Agreement in NJ?

If you skip it entirely:

• New Jersey statutory defaults apply
• Succession planning may be incomplete
• Authority during incapacity may be unclear
• Estate administration may become more complicated

You may not notice these gaps — until a crisis forces you to.

Should a Single-Member LLC in NJ Have a Written Operating Agreement?

Yes.

While not legally required in writing, a properly drafted operating agreement:

• Strengthens liability protection
• Clarifies succession
• Protects your business continuity
• Aligns your LLC with your estate plan
• Reduces uncertainty in banking and lending situations

If you are building a serious business, structure is not optional.

Frequently Asked Questions (FAQ)

Is an operating agreement required in NJ for a single-member LLC?

No, New Jersey does not require a written operating agreement. However, operating without one means the statute controls your LLC.

Do I have to file my operating agreement with the State of New Jersey?

No. Operating agreements are internal documents and are not filed with the Division of Revenue.

Can I write my own operating agreement?

You can, but poorly drafted agreements often create more problems than they solve — especially regarding succession and incapacity planning.

What happens to my LLC if I become incapacitated?

Without clear authority designated, control may become unclear. Coordination between your operating agreement and estate planning documents is critical.

Final Thoughts: Structure Creates Stability

Many entrepreneurs believe that because they are the only owner, formal documentation doesn’t matter.

It does.

New Jersey may not require a written operating agreement — but responsible business ownership demands clarity.

If you formed a single-member LLC in NJ and are unsure whether your structure protects you properly, it may be time for a review.

Need Clarity on Your LLC Structure?

Running a business without legal clarity is risky.

If you’re building or growing a business and want clarity on structure, contracts, and next steps, schedule your FREE Business Strategy Call here.