Company Agreement
The principal governance document of a Texas LLC, the contract among members (and managers, if applicable) that establishes the LLC's internal rules. The TBOC equivalent of "operating agreement" or "limited liability company agreement" used in other states.
A company agreement is the principal governance document of a Texas LLC, the contract among the members (and, if applicable, managers) that establishes the LLC's internal rules. The TBOC uses the term "company agreement"; the Delaware equivalent is "limited liability company agreement"; the colloquial term, particularly in non-Texas markets, is "operating agreement." The terms are typically used interchangeably in practice.
What it governs
Under § 101.052, the company agreement governs (a) the relations among the LLC's members, managers, officers, and assignees, and (b) other internal affairs of the company. Where the company agreement is silent, the default rules of TBOC Chapter 101 and Title 1 fill the gap.
Form and execution
The company agreement may be written, oral, or implied. § 101.001(1). In practice, every responsibly-formed Texas LLC has a written company agreement, oral and implied agreements produce expensive disputes. The agreement does not need to be filed with the Texas Secretary of State and is not a public document.
The Texas-distinctive flexibility
Tex. Bus. Orgs. Code § 101.052(c) provides that, with limited exceptions specified in § 101.054, any provision of TBOC Title 3 or Title 1 applicable to LLCs may be waived or modified in the company agreement. This makes the Texas company agreement the most contractually flexible governance document for any Texas business entity. Provisions that can be modified include voting rights (default: per capita, § 101.354), distribution rights (default: pro rata by contribution, § 101.203), management structure (member vs. manager-managed), and, under § 101.401 as amended effective May 14, 2025, fiduciary duties themselves, which the company agreement may now expand, restrict, or eliminate. The same SB 29 legislation added § 152.002(e), which extends comparable elimination authority to Texas limited partnerships through the partnership agreement. Texas now offers a unified contractual-fiduciary-duty flexibility regime across LLCs and limited partnerships that is competitive with Delaware.
Non-waivable provisions
Under § 101.054, certain provisions cannot be waived or modified by the company agreement, including the duty to take action in good faith, the right to information necessary for protecting member interests, and certain provisions related to indemnification and the rights of third-party creditors.
Amendment
Default rule: a company agreement may be amended only with the unanimous consent of all members. § 101.053. This default is itself routinely modified, most company agreements substitute a majority-in-interest or supermajority threshold.
In Texas, what the company agreement says matters more than what the statute says. The default rules in TBOC Chapter 101 frequently produce results no one would want, equal voting regardless of contribution, no withdrawal rights, distributions only when affirmatively authorized, and the company agreement is the mechanism for tailoring those rules to the parties' actual deal. A poorly drafted or non-existent Texas company agreement is the single most common source of business divorces, derivative actions, and judicial-dissolution efforts. Spending the money on a careful company agreement at formation is, by orders of magnitude, the cheapest legal investment a Texas LLC will ever make.
Companion article: Starting a Business in Texas