Forming a Texas LLC takes one filing — the Certificate of Formation. Running one well takes a document the state never sees: the company agreement (Texas's statutory name for an operating agreement, Business Organizations Code Chapter 101). Skip it and your LLC still exists, but every question the certificate doesn't answer — who owns what, who decides, what happens when someone leaves — gets answered by the statute's defaults instead of by you.
'Company agreement' is the Texas term
Chapter 101 of the Business Organizations Code governs Texas LLCs, and § 101.052 makes the company agreement the governing document for the company's affairs. Nearly every default rule in the statute bends to what the agreement says — which is the point: the legislature wrote defaults for people who didn't write their own.
The agreement is internal. You do not file it with the Secretary of State; you keep it with the company's records and produce it when a bank, title company, or buyer asks who is authorized to act.
What the defaults decide if you don't
Without a written agreement, the statute and general law fill in: how profits split, what vote is needed for major decisions, whether and how a member can transfer an interest, and what happens on death or exit. Those defaults are rarely what the owners would have chosen.
- Ownership and capital: who contributed what, and what percentage it bought.
- Management: member-managed or manager-managed, and what the managers can do alone.
- Distributions: when money comes out and in what proportions.
- Exits: buyout terms when a member dies, divorces, retires, or wants out.
Single-member LLCs need one most
One-owner LLCs skip the agreement most often — and they are the ones courts scrutinize when a creditor argues the LLC is indistinguishable from its owner. A signed company agreement, observed in practice, is core evidence that the company is real and separate. Banks and title companies routinely require it for accounts and closings.
Texas housekeeping to calendar
Texas has no annual report for LLCs, but it does have an annual franchise tax filing (most small LLCs owe no tax but must still file the report), and § 5.201 requires a registered agent and office in Texas at all times. Neither lives in the company agreement, but both belong on the same calendar as your formation documents.
Frequently Asked Questions
Is a company agreement required in Texas?
No statute forces you to have one — the LLC exists once the Certificate of Formation is filed. But without one, statutory defaults govern your ownership, management, and exits, and banks or buyers will eventually ask for the document anyway.
Do I file the company agreement with the state?
No. It is an internal document kept with company records. Only the Certificate of Formation (and registered-agent information) is on file with the Secretary of State.
Company agreement vs. operating agreement — any difference?
Same document, different label. Texas's Business Organizations Code uses 'company agreement'; most other states say 'operating agreement.' Our Texas document uses the statutory term.
Can I amend it later?
Yes — the agreement sets its own amendment rule (typically a written amendment adopted by the members). Major life events — new member, new investment, a member's divorce or death — are exactly when you should.