In Texas, an operating agreement is formally known under state law as a "Company Agreement." Whether you operate a construction business in Dallas or an oilfield services firm in Houston, your Texas company agreement is the document that sets the ground rules for ownership and protects your personal assets.
Governed by Title 3, Chapter 101 of the Texas Business Organizations Code (BOC), a written company agreement overrides state default rules and ensures commercial banks recognize your entity's borrowing and signing powers.
Texas LLC operating agreement requirements
While the Texas Secretary of State does not ask you to upload your company agreement during filing, Texas BOC § 101.052 explicitly grants the company agreement the highest legal authority over internal corporate affairs:
- BOC § 101.052 Scope: A company agreement governs relations among members, managers, and the LLC.
- BOC § 101.107 Capital Rules: Establishes how member capital contributions are documented and prevents unauthorized capital calls.
- BOC § 101.206 Distribution Limitations: Prohibits illegal distributions that would render the company insolvent under Texas law.
How a Texas construction company managed heavy equipment financing
Say three partners form a Texas LLC in Fort Worth to provide commercial excavation services. The company needs to finance a $120,000 excavator through a regional commercial bank.
The lender's legal department requests a signed copy of the Texas Company Agreement to verify which member has legal authority to execute commercial notes and pledge company assets. With a clear manager authority clause, the managing partner signs the loan documents without requiring all three partners to attend the bank closing.
Member-managed vs. manager-managed in Texas
Under Texas BOC § 101.251, a Texas LLC must designate its "Governing Authority" as either:
| Management Type | Governing Authority in Texas | Best Applied For |
|---|---|---|
| Member-Managed | All members are governing persons. Each member has authority to bind the company. | Hands-on co-founders, trade partners, and family businesses. |
| Manager-Managed | Only designated managers are governing persons. Non-managing members have no agency power. | Real estate syndicates, energy investments, and passive investor groups. |
Texas-specific clauses and defaults
Our Texas company agreement template incorporates key Texas provisions:
- Texas Franchise Tax Allocation: Clarifies responsibility for preparing annual Texas Comptroller filings and Public Information Reports (PIR).
- BOC § 101.111 Charging Order Rights: Restricts personal creditor remedies to charging orders over distribution payments, preserving company stability.
- BOC Chapter 11 Winding Up Protocol: Defines the precise liquidation hierarchy for paying creditors, settling liabilities, and distributing surplus capital.
Frequently asked questions
Why does Texas call an operating agreement a 'Company Agreement'?
Under Texas Business Organizations Code (BOC § 101.052), Texas law uses the formal legal term "Company Agreement." It functions identically to what other states call an LLC operating agreement, establishing internal member rules, capital accounts, and management authority.
Do I file the Texas company agreement with the Texas Secretary of State?
No. You file the Certificate of Formation (Form 205) with the Texas Secretary of State (SOSDirect). The company agreement is an internal private document that remains in your company records.
What is the Texas Franchise Tax requirement for LLCs?
Every Texas LLC must file an annual Texas Franchise Tax Report and Public Information Report (PIR) with the Texas Comptroller of Public Accounts by May 15. LLCs with annual gross revenues below the statutory threshold file a No Tax Due report.
Can a Texas LLC be manager-managed without listing managers publicly?
In Texas, your initial Certificate of Formation lists your governing authority (managers or members). However, your company agreement contains the detailed rules regarding manager removal, compensation, and spending limits.
What voting percentage is required to amend a Texas company agreement?
Under BOC § 101.054, amendments to a Texas company agreement generally require unanimous member consent unless your written agreement specifies a lower threshold (such as a majority or supermajority vote).
The Bottom Line
A Texas Company Agreement provides the structural foundation for your business under the Texas Business Organizations Code. Protect your member equity and satisfy commercial lenders. Use our generator above to create your free Texas operating agreement today.