2013 Maryland Code
CORPORATIONS AND ASSOCIATIONS
§ 4A-402 - Operating agreement
(a) In general. -- Except for the requirement set forth in § 4A-404 of this subtitle that certain consents be in writing, members may enter into an operating agreement to regulate or establish any aspect of the affairs of the limited liability company or the relations of its members, including provisions establishing:
(1) The manner in which the business and affairs of the limited liability company shall be managed, controlled, and operated, which may include the granting of exclusive authority to manage, control, and operate the limited liability company to persons who are not members;
(2) The manner in which the members will share the assets and earnings of the limited liability company;
(3) The rights of the members to assign all or a portion of their membership interest;
(4) The circumstances in which a person may be admitted as a member of the limited liability company;
(5) (i) The right to have and a procedure for having a member's membership interest evidenced by a certificate issued by the limited liability company, which may be issued in bearer form only if specifically allowed by the operating agreement;
(ii) The procedure for assignment, pledge, or transfer of any membership interest represented by the certificate; and
(iii) Any other provisions dealing with the certificate;
(6) The method by which the operating agreement may from time to time be amended, which may include a requirement that an amendment be approved:
(i) By a person who is not a party to the operating agreement or who is not a member of the limited liability company; or
(ii) On the satisfaction of other conditions specified in the operating agreement;
(7) The rights of any person, including a person who is not a party to the operating agreement or who is not a member of the limited liability company, to the extent set forth in the operating agreement; or
(8) Procedures relating to:
(i) Notice of the time, place, or purpose of any meeting at which any matter is to be voted on by members;
(ii) Waiver of notice of meetings;
(iii) Action by consent without a meeting;
(iv) The establishment of a record date;
(v) Quorum requirements;
(vi) Voting in person or by proxy;
(vii) Voting rights of various classes of members; or
(viii) Any other matter with respect to the exercise of voting rights by members.
(b) Initial agreement. --
(1) The initial operating agreement shall be agreed to by all persons who are then members.
(2) Unless the articles of organization specifically require otherwise, the operating agreement need not be in writing.
(c) Amendment. --
(1) If the operating agreement does not provide for the method by which the operating agreement may be amended, then all of the members must agree to any amendment of the operating agreement.
(2) To the extent that an operating agreement provides for the manner in which the operating agreement may be amended, the operating agreement may be amended only in that manner, provided that the approval of a person may be waived by the person and that conditions may be waived by a person for whose benefit the conditions were intended.
(3) (i) Except as provided in subparagraph (ii) of this paragraph, or unless otherwise agreed, an amendment to an operating agreement is not required to be in writing.
(ii) An amendment to an operating agreement must be evidenced by a writing signed by an authorized person of the limited liability company if:
1. The amendment was adopted without the unanimous consent of the members; or
2. An economic interest in the limited liability company has been assigned to a person who has not been admitted as a member.
(4) A copy of any written amendment to the operating agreement shall be delivered to each member who did not consent to the amendment and to each assignee who has not been admitted as a member.
(d) Enforcement. --
(1) A court may enforce an operating agreement by injunction or by granting such other relief which the court in its discretion determines to be fair and appropriate in the circumstances.
(2) As an alternative to injunctive or other equitable relief, when the provisions of § 4A-903 of this title are applicable, the court may order dissolution of the limited liability company.
(3) An operating agreement of a limited liability company with one member is not unenforceable on the grounds that there is only one person who is party to the operating agreement.
(4) A limited liability company:
(i) Is not required to execute its operating agreement; and
(ii) Is bound by its operating agreement, regardless of whether the limited liability company has executed the operating agreement.
(5) An operating agreement that is duly adopted or amended is binding on each person who is or becomes a member of the limited liability company and each person who is or becomes an assignee of a member of the limited liability company, regardless of whether the person has executed the operating agreement or amendment.
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