I have written many times about limited liability company operating agreements. This post answers the following question: Is an operating agreement required?
As is the case for many issues pertaining to limited liability companies, the answer varies from state to state. To answer this question, we need to examine the relevant statutes for each state.
Most States, Operating Agreement Not Required
Most states do not require that an LLC have an operating agreement. For example:
- In California,Â Â Corporations Code Section 17701.02(s) defines an operating agreement. However, the statutes that govern formation of LLCs do not require an operating agreement.
- In Delaware,Â Limited Liability Company Act Section 18-101(7) defines a limited liability company agreement (Delaware’s term for an operating agreement). But here, too, the statutes that govern formation of LLCs do not require an operating agreement.
Some States, Operating Agreement Required
However, some states do require an operating agreement.
The following are the states of which I am aware. If I learn about others, I will add them.
- Maine – Revised Statutes Section 1531.1.B states, in relevant part: “In order to form a limited liability company [a] limited liability company agreement must be entered into or otherwise existing.”
- Missouri – Revised Statutes Section 347.081 states, in relevant part: “The member or members of a limited liability company shall adopt an operating agreement containing such provisions as such member or members may deem appropriate….”
- New York – Limited Liability Company Law Section 417 states, in relevant part: “Subject to the provisions of this chapter, the members of a limited liability company shall adopt a written operating agreement that contains any provisions not inconsistent with law or its articles of organization….”
Dana H. Shultz, Attorney at Law +1 510-547-0545 dana [at] danashultz [dot] com
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