Should I elect S-corp taxation as a single-member LLC?

Maybe. The S-corp election lets you take part of your income as W-2 salary (subject to FICA) and the rest as distributions (no self-employment tax). Break-even is typically around $70-80K of net profit. Below that, the payroll-processing cost and added tax-return complexity outweigh the SE-tax savings. Above $100K, the savings can be substantial. Discuss with a CPA before electing.

Will a single-member LLC protect my personal assets?

Yes for "inside-out" claims (LLC creditors going after your personal assets) — this protection is the core reason to form an LLC. "Outside-in" protection (your personal creditors going after your LLC interest) is weaker for single-member LLCs in most states. Wyoming, Nevada, Delaware, and South Dakota offer "charging order exclusivity" which provides the strongest outside-in protection.

Do I need to maintain separate bank accounts?

Yes — absolutely. Commingling personal and business funds is the #1 way courts pierce the LLC veil and impose personal liability. Open a dedicated business checking account immediately after getting your EIN. Sign all business contracts in the LLC name (e.g., "Cardinal Strategy LLC, by Morgan Hayes, Member"). File the LLC's taxes separately (or as Schedule C clearly tied to the LLC).

What happens to my LLC when I die?

Without succession planning, some states dissolve the single-member LLC by operation of law on the member's death, leaving the business in probate limbo for months. Solutions: (a) transfer the LLC interest to a revocable living trust during your lifetime; (b) name a successor in the operating agreement; (c) hold the LLC interest in joint tenancy with right of survivorship. Most operating agreements (including this template) include a succession clause.

Single-Member LLC Operating Agreement

Operating agreement for a single-member LLC — establishes the LLC as a separate entity, documents capital, and reinforces the corporate veil.

Customise

Effective date

LLC name (exact)

State of formation

Principal place of business

Sole member — full legal name

Sole member — address

Initial capital contribution ($)

Business purpose

Federal tax classification

Fiscal year end

Succession plan (death/disability)

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OPERATING AGREEMENT
of
Cardinal Strategy LLC
a Wyoming Single-Member Limited Liability Company

This Operating Agreement (this "Agreement") is entered into and effective as of May 7, 2026 (the "Effective Date") by Morgan T. Hayes (the "Member"), being the sole member of Cardinal Strategy LLC (the "Company"), a single-member limited liability company organized under the laws of the State of Wyoming.

ARTICLE I — FORMATION AND PURPOSE

1.1 Formation. The Company was formed by filing Articles of Organization (or Certificate of Formation) with the Wyoming Secretary of State and is governed by this Agreement and the Wyoming Limited Liability Company Act (the "Act").

1.2 Name. The name of the Company is Cardinal Strategy LLC.

1.3 Principal Office. The principal office is 30 N Gould St, Sheridan, WY 82801, or such other location as the Member may designate.

1.4 Purpose. The Company is formed to engage in any lawful business activity for which a limited liability company may be organized under the laws of the state of formation, including without limitation [describe primary line of business such as marketing consulting, software development, real estate investment, etc.].

1.5 Term. The Company shall continue in perpetuity unless dissolved as provided herein.

1.6 Single Member; No Other Members. The Member is the sole member of the Company. The Member intends that the Company be treated as a single-member limited liability company and, for federal income tax purposes, as a disregarded entity for federal income tax purposes (Schedule C, sole proprietor treatment).

ARTICLE II — MEMBER, CAPITAL, AND OWNERSHIP

2.1 Sole Member. The sole Member of the Company is:

  Name:    Morgan T. Hayes
  Address: 742 Evergreen Terrace, Springfield, IL 62704
  Initial Capital Contribution: $1,000.00
  Membership Interest: 100%

2.2 Additional Capital. The Member may, but is not required to, make additional capital contributions at any time.

2.3 Distributions. The Member may take distributions from the Company at any time, subject to the Company's obligations to creditors and retention of reasonable working capital.

2.4 No Salary by Default. Except as elected pursuant to S-corporation taxation, the Member is not entitled to a salary or wage from the Company; rather, the Member receives the entire net income of the Company through distributions.

ARTICLE III — MANAGEMENT

3.1 Member Management. The Company is member-managed. The Member has full and exclusive authority to manage the business and affairs of the Company, including without limitation: entering into contracts; opening and operating bank accounts; hiring employees and contractors; acquiring and disposing of property; obtaining insurance; and binding the Company in all matters.

3.2 No Required Formalities. Because there is only one Member, the Member need not hold meetings or maintain meeting minutes; however, all material decisions affecting the Company should be documented in writing to support the separation of the Company from the Member personally.

3.3 Officers. The Member may appoint officers (e.g., President, Treasurer, Secretary) of the Company with such duties as the Member designates.

ARTICLE IV — TAX MATTERS

4.1 Tax Classification. The Company shall be treated as a disregarded entity for federal income tax purposes (Schedule C, sole proprietor treatment).

4.2 Fiscal Year. The fiscal year of the Company ends December 31.

4.3 Books and Records. The Company shall maintain accurate books of account at the principal office, separate from the Member's personal books and records.

4.4 Separateness Covenants. To preserve the limited-liability protection of the Company, the Member agrees: (a) to maintain separate Company bank accounts and not commingle Company funds with personal funds; (b) to sign all Company contracts in the name of the Company (e.g., "Cardinal Strategy LLC, by Morgan T. Hayes, Member"); (c) to keep separate financial records; (d) to file the Company's tax returns or schedules separately from any personal documentation that might suggest personal liability; and (e) to maintain adequate capitalization for the Company's reasonably foreseeable obligations.

ARTICLE V — LIMITED LIABILITY

5.1 Limited Liability. The Member shall not be personally liable for any debt, obligation, or liability of the Company solely by reason of being the Member, except as expressly provided by the Act or this Agreement.

5.2 Indemnification. The Company shall indemnify the Member, to the fullest extent permitted by the Act, against any loss, liability, damage, claim, or expense (including reasonable attorneys' fees) incurred in the course of acting on behalf of the Company in good faith.

ARTICLE VI — TRANSFERS, DISSOLUTION, AND SUCCESSION

6.1 Transfer. The Member may transfer all or any portion of the Member's interest in the Company at any time. A transfer that admits a new member will convert the Company from a single-member to a multi-member LLC, and at that time the Member shall adopt a new operating agreement reflecting the multi-member structure.

6.2 Dissolution. The Company shall be dissolved upon: (a) the written election of the Member; (b) entry of a decree of judicial dissolution; or (c) any other event causing dissolution under the Act that the Member does not elect to waive.

6.3 Succession on Death or Incapacity. Upon the Member's death or permanent incapacity, the Member's membership interest shall pass to [Name], the Member's [spouse / child / revocable living trust / personal representative]. The successor shall have all rights of the original Member, including the right to continue or dissolve the Company.

6.4 Winding Up. Upon dissolution, the Member shall apply the Company's assets first to creditors (including the Member if a creditor), and then distribute any remaining balance to the Member or the Member's successor.

ARTICLE VII — MISCELLANEOUS

7.1 Governing Law. This Agreement is governed by the laws of the State of Wyoming, without regard to conflicts-of-law principles.

7.2 Amendment. This Agreement may be amended by a written instrument executed by the Member.

7.3 Severability. If any provision is held invalid, the remaining provisions remain in full force and effect.

7.4 Entire Agreement. This Agreement, together with the Articles of Organization, constitutes the entire agreement of the Member with respect to the operation of the Company.

7.5 Counterparts. This Agreement may be executed in counterparts, each of which is deemed an original.

IN WITNESS WHEREOF, the Member has executed this Agreement as of the Effective Date.


_______________________________
Morgan T. Hayes
Sole Member

Date: ____________________

About this template

A single-member LLC operating agreement is the document most often skipped — and the most consequential when a court asks whether to "pierce the corporate veil." A single-member LLC owner who lacks an operating agreement, mixes personal and business funds, and signs contracts in their personal name is functionally indistinguishable from a sole proprietor, and courts in many states will hold the owner personally liable for business debts. The operating agreement, even in a single-member context, exists primarily to (1) document that the LLC is a separate legal entity, (2) establish the "separateness covenants" (segregated banking, distinct contracting, separate books) that protect the corporate veil, and (3) plan for the owner's death or incapacity — without succession provisions, a single-member LLC may be dissolved by operation of law on the owner's death in some states, leaving the business in probate limbo. Five states explicitly require an operating agreement (Delaware, California, Maine, Missouri, New York), and even single-member LLCs in those states must adopt one. Federal tax considerations: the IRS default treats a single-member LLC as a "disregarded entity" — meaning all activity flows to the owner's Schedule C, and the LLC files no separate federal return. The trade-off: SE tax on all profit. Active single-member LLCs above approximately $70,000-80,000 in net profit often benefit from electing S-corp taxation (Form 2553, due within 75 days of formation or by March 15 of the tax year), allowing the owner to take part of the profit as W-2 salary (subject to FICA) and the rest as distributions (no SE tax). The IRS requires "reasonable compensation" for the W-2 portion. Drawbacks: payroll-processing cost (~$50/month), more complex tax return (Form 1120-S), and additional state-level requirements. Asset protection: a properly maintained single-member LLC provides "inside-out" liability protection — meaning the owner's personal assets are protected from business creditors. "Outside-in" protection (creditors of the owner reaching the LLC interest) is less robust in single-member context and varies dramatically by state; Wyoming, Nevada, Delaware, and South Dakota offer "charging order exclusivity" which is the strongest protection (creditor cannot foreclose on the LLC interest, only obtain a charging order on distributions). Most states offer charging orders only for multi-member LLCs and treat single-member LLCs differently — a key reason high-net-worth individuals often add a nominal second member (1% interest to spouse or trust) to gain charging-order protection. Use this template for any single-member LLC; if you add a second member, transition to the multi-member operating-agreement-llc template.

When to use it

Forming a new single-member LLC for consulting, freelancing, real estate, or e-commerce.
Required by law in: Delaware, California, Maine, Missouri, New York.
Documenting separateness when bank or vendor requires written operating agreement.
Updating an LLC formed without an operating agreement (banks, lenders, vendors increasingly require one).
Establishing succession plan for owner's death or incapacity.

What to include

Member identification and capital contribution.
Business purpose and state of formation.
Tax classification (disregarded, S-corp, or C-corp).
Separateness covenants to protect the corporate veil.
Succession provisions for owner's death or incapacity.
Member's authority and signing protocol.

Frequently asked

Three reasons: (1) it documents the LLC as separate from you personally, which protects the corporate veil — without it, courts can hold you personally liable for business debts; (2) it provides a succession plan for your death or incapacity; (3) banks, lenders, and many vendors require a signed operating agreement before doing business with the LLC. Five states (DE, CA, ME, MO, NY) explicitly require one regardless of single- or multi-member status.

⚠ Legal disclaimer. Single-member LLC laws vary by state. Charging-order protection for single-member LLCs is significantly weaker in most states than for multi-member LLCs. Tax classification choices (default disregarded entity vs. S-corp vs. C-corp election) have significant federal and state consequences and should be discussed with a CPA. State-specific requirements (registered agent, annual report, franchise tax, BOI/FinCEN reporting) must be maintained continuously to preserve LLC status. This template is a starting point only; for any LLC with real estate, regulated industry, or expected revenue above $250K, engage a business attorney and CPA before adopting. Not legal or tax advice.