Do Corporations Need Operating Agreements? What You Should Know

If you’ve ever Googled “does a corporation need an operating agreement,” you’re not alone. This question confuses thousands of founders every year because business governance terminology can get complicated when figuring out which legal document your company actually needs.

Here’s the short answer: traditional corporations don’t use operating agreements, but you still need internal governance documents to manage your company properly.

No, corporations (C corps and S corporations) do not use operating agreements like LLCs do. Instead, corporations rely on bylaws and shareholder agreements to govern internal operations.

• An operating agreement is designed specifically for a limited liability company (LLC) and outlines how members and managers run the business.
• Corporations formed under state law (Delaware, New York, California, etc.) are expected to adopt bylaws after filing articles of incorporation.
• Banks, investors, and platforms like Kumospace typically ask corporations for bylaws and board resolutions, not an LLC-style operating agreement.
• Some people casually call any internal governance document an operating agreement, but for corporations in 2026, the correct terms are bylaws and, where needed, a shareholder agreement.

If you’re forming a corporation in 2026 and want a quick checklist, here’s what you need to know.

Corporations do not legally rely on LLC operating agreements. Instead, they must:

• File articles of incorporation (sometimes called a certificate of incorporation or corporate charter) with the state
• Adopt corporate bylaws, usually at the first board meeting after formation
  

Additional points to keep in mind:

• Most states, including Delaware, Nevada, and Texas, require corporations to adopt bylaws even though bylaws are not filed with the secretary of state
• Closely held corporations, like a 3-owner startup in California or New York, often add a shareholder agreement to cover buy-sell provisions, deadlock resolution, and exit strategy
• Similar to an LLC operating agreement, bylaws and shareholder agreements help preserve limited liability and make decision making clear when disputes arise
• These documents protect a business owner’s personal assets by establishing the company as a separate entity with formal governance procedures

Understanding operating agreements starts with recognizing that LLCs and corporations are two fundamentally different entity types under state law. Each has its own governance framework.

What’s an operating agreement?

• The standard internal contract for a limited liability company
• Governs the relationship between LLC members
• An operating agreement outlines ownership percentages, profit distribution, and management structure
• Addresses whether the LLC is member-managed or manager-managed

What are corporate bylaws?

• The parallel internal rules for corporations (C corps and S corps)
• Focus on directors and officers, not “members”
• Cover board and shareholder meetings, voting procedures, and how vacancies are filled
• Describe the company’s bylaws for running internal affairs

What both documents have in common:

• Describe how decisions are made
• Spell out voting rights and voting thresholds
• Clarify who handles day-to-day operations versus strategic decisions
• Neither is typically filed with the state; they’re internal documents

Concrete example:

A 3-member LLC with an operating agreement might specify that each member owns 33.3 percent and that major decisions require unanimous consent from the other members, while a 3-shareholder corporation governed by bylaws defines how the board of directors is elected, when shareholders vote, and what officer positions exist, and if the shareholders want similar protections around ownership transfers, they add a separate shareholder agreement.

Some small corporations informally label their internal document an “operating agreement,” even though state corporate statutes usually reference “bylaws.”

• A few lawyers and DIY templates for S corporations in the 2026 market documents as an “S corp operating agreement,” but the content is functionally closer to bylaws plus a shareholder agreement
• In Delaware, California, and New York corporate codes, the official corporate governance term is bylaws, not operating agreement, for corporations formed under those statutes
• If you formed an S corp with an online service and received a document called “S corporation operating agreement,” review it to confirm it:
• Appoints directors and officers
• Sets shareholder voting rules
• Describes meetings and record-keeping
• Addresses share transfers and buy-sell terms
• For legal clarity with lenders, investors, and government agencies, it’s better to title corporate governance documents as “Bylaws” and “Shareholder Agreement” rather than “Operating Agreement”
• Using proper terminology helps ensure smooth operations when dealing with banks or potential investors who expect standard corporate documentation

The exact set of documents depends on whether you choose an LLC or corporation and which state you file in. Here’s a breakdown of the most common requirements.

For corporations, core documents include:

• Articles of incorporation (or certificate of incorporation) filed with the state’s office
• Bylaws adopted by the board
• Initial board resolutions appointing officers, approving bylaws, and authorizing a bank account
• Shareholder agreement for multi-owner, closely held companies
• Registered agent designation

Important note: None of these corporate documents are usually filed with the secretary of state except the articles and later amendments; bylaws and shareholder agreements remain internal records.

For LLCs, core documents include (for contrast):

• Articles of organization (or certificate of formation) filed with the state
• Operating agreement signed by the members
• Member or manager resolutions for bank accounts and major decisions

What third parties typically ask for in 2026:

• Filed formation documents (proof of filing articles)
• EIN confirmation from the IRS
• Either bylaws (for corporations) or operating agreement (for LLCs)
• A signed resolution authorizing who can sign contracts

Example timeline for a 2026 startup forming a Delaware C corporation:

1. File certificate of incorporation in March 2026
2. Hold first board meeting within a few weeks
3. Adopt bylaws at that meeting
4. Issue founder stock
5. Store signed documents in a secure digital workspace like Kumospace alongside other corporate records

While states like Delaware and Nevada give corporations flexibility, most lawyers expect bylaws to explicitly address core governance topics.

Standard bylaw provisions typically cover:

• Corporate purpose and principal office location
• Size of the board of directors and how directors are elected or removed
• Officer positions (CEO, President, Secretary, CFO) and their responsibilities
• How and when shareholder meetings are held (annual and special)
• Quorum and voting requirements for shareholders and directors

Share-related provisions:

• How stock certificates or book-entry shares are issued
• Restrictions on transferring shares in closely held corporations
• Processes for filling board vacancies or handling director resignations

Modern bylaw additions:

• Indemnification and advancement of expenses for directors and officers
• Requirements to maintain corporate records and minutes
• Procedures for amending bylaws by the board members or shareholders
• Provisions for holding virtual meetings

Practical examples:

• A three-person tech startup in Austin might adopt bylaws requiring board approval for any debt over $50,000
• A family-owned corporation in Chicago might add special share transfer restrictions to keep ownership within the family
• A remote-first company might specify that all board meetings can be held via video conference using platforms like Kumospace

Many entrepreneurs hear “operating agreement” when forming an LLC and then assume their corporation needs the same document. Here’s why that’s misleading.

An LLC operating agreement usually addresses:

• Ownership percentages and member contributions
• Whether the LLC is member-managed or manager-managed
• Distributions of profits and losses, which may or may not follow ownership percentages
• Voting thresholds for key decisions, such as simple majority, supermajority, or unanimous
• What happens when new members join or remaining members want to exit

Why it’s different from corporate documents:

• LLCs don’t have shares or a board of directors by default
• The operating agreement replaces many functions that bylaws and shareholder agreements perform for corporations
• The LLC’s structure is defined almost entirely by its operating agreement rather than statutory defaults

State requirements:

• Some states like California, Delaware, and New York strongly recommend (or effectively expect) multi-member LLCs formed after 2020 to put terms in a written operating agreement
• Without one, an LLC operates under default rules set by state statute which may not match what members actually want

A note on terminology:

For branding consistency, some business platforms and virtual office tools, including teams that collaborate in Kumospace, may use “operating agreement” as shorthand for foundational internal rules, but the legally required term depends on whether your business entity is an LLC or a corporation.

Corporations don’t adopt LLC operating agreements, but they often use shareholder agreements to set terms similar to what LLC members negotiate.

Shareholder agreements or buy-sell agreements for small corporations often cover:

• Restrictions on selling or gifting shares to outsiders
• What happens on death, disability, or departure of a co-founder
• Formulas for valuing shares (using a multiple of EBITDA or independent appraisal)
• Drag-along and tag-along rights for future sale events
• Dispute resolution mechanisms to prevent disputes

These provisions control many of the same issues an LLC operating agreement would handle, but they’re layered on top of the corporate structure defined by the articles and bylaws.

Practical example:

Three founders forming a Delaware C corporation can use standard venture-style bylaws and a shareholder agreement to cover vesting schedules, rights of first refusal, and dispute resolution, providing protections similar to an LLC operating agreement. It’s recommended to consult a lawyer to determine which terms belong in the bylaws, which bind all shareholders, and which should go in a separate shareholder agreement, a private contract among signing parties.

The rules as of 2026 still vary significantly by state. Founders should confirm current statutes wherever they file.

States that require or effectively mandate written operating agreements for LLCs:

For corporations:

• Nearly every state corporate statute expects corporations to adopt bylaws after filing articles
• Bylaws are typically adopted by the incorporator or the initial board of directors at an organizational meeting
• Failure to adopt or follow bylaws can be used as evidence to “pierce the corporate veil” in lawsuits

If you’re forming a corporation this year and want an actionable list instead of theory, here’s your roadmap.

Typical formation sequence:

1. Choose a state of incorporation (commonly Delaware for startups, home state for many small businesses)
2. File articles (or certificate) of incorporation with the Secretary of State and pay the filing fee
3. Obtain an EIN from the IRS online (often same day)
4. Hold an organizational meeting (or sign written consents) for the incorporator and/or initial board

At the organizational meeting, the board should:

• Adopt bylaws
• Appoint officers (CEO/President, Secretary, CFO, etc.)
• Approve the issuance of shares to founders and early employees
• Approve opening a business bank account
• Authorize signing any key contracts for business activities

Document storage:

• Store all signed bylaws, consents, and stock issuance documents in a secure, searchable hub
• Founding teams can access documents remotely through dedicated legal folders in Kumospace alongside other corporate records
• Ensure board members and officers know where to find governance documents

Ongoing maintenance:

• Schedule at least one formal board meeting per year
• Keep written minutes documenting major decisions
• Review and update bylaws as the company grows
• This maintains corporate formalities and strengthens your solid foundation as a separate entity

Terminology errors can create real confusion with banks, investors, and regulators. Here are the most frequent misunderstandings.

Documentation mix-ups:

• Forming a corporation but downloading an LLC operating agreement template and trying to use it unchanged
• Mixing LLC language such as members, membership interests, and managers into corporate documents that should reference shareholders, directors, and officers
• Failing to adopt bylaws because founders assumed the filed articles were sufficient

Informal governance problems:

• Some founders only keep informal notes or Slack messages instead of signed bylaws and board consents
• This can undermine limited liability if challenged in court because the company may not be treated as a separate entity
• Failing to document how the business actually operates can put a business owner’s personal assets at risk

Promise vs. paperwork gaps:

• Promising investors or employees certain rights (voting rights, liquidation preferences) in pitches or emails
• Never reflecting those rights in the bylaws, shareholder agreements, or stock purchase agreements
• This creates legal exposure and damages trust

Best practice: Review your internal corporate documents at least annually, ideally before major fundraising rounds or a sale, to ensure the paperwork aligns with how the business actually operates and the ownership structure you have described to stakeholders.

Corporate governance isn’t just about paperwork; it connects to day-to-day operations, especially for hybrid and distributed teams in 2026.

How a platform like Kumospace can support good corporate hygiene:

• Provides a persistent virtual office where board members and officers can meet live to review bylaws, shareholder agreements, and resolutions
• Hosts recurring virtual board and shareholder meetings with screen-sharing of draft governance documents
• Maintains an organized digital space for compliance checklists and links to your document repository
• Reduces the chance that key action items (like adopting bylaws or updating them) get lost among email attachments

Holding meetings virtually:

• Most state laws allow board and shareholder meetings by video conference if participants can hear each other simultaneously
• Your corporation bylaws should explicitly authorize virtual meetings
• Document the meeting with formal minutes just as you would for an in-person gathering

Corporations do not need an operating agreement in the LLC sense, but they do need properly drafted and maintained bylaws. The difference between LLC and corporate governance is about structure and terminology, not the need for clear internal rules.

Confirm whether your entity is an LLC or a corporation and which state it was formed in. Corporations should have filed articles, signed bylaws, and board resolutions, while LLCs should have a written operating agreement signed by all members that reflects how the business operates in 2026.

Centralize governance documents and meeting records so they are easy to access and review, for example by pairing cloud storage with a virtual office environment like Kumospace for regular board meetings and approvals. Having the correct governance documents in place is foundational to protecting the business and its owners.