Limited liability companies: operating agreements

Question 1

Operating agreements

Answer 1

LLCs generally do not require operating agreements.

Where there is an operating agreement, its provisions take precedence over contrary statutory provisions.

Question 2

Fiduciary waiver

Answer 2

The operating agreement may amend the duty of loyalty so long as the amendment is not manifestly unreasonable.

For example:

• Allowing members to have an interest in a business that “may be competitive” with the LLC likely is not manifestly unreasonable.

Question 3

Modification

Answer 3

Unless the operating agreement provides otherwise, the assent of all the persons then members is required for something to be considered part of the operating agreement.

An agreement among fewer members might be enforceable among those members, but it would not be part of the operating agreement.