2023 New York Laws
LLC - Limited Liability Company Law
Article 4 - Management by Members or Managers
417 - Operating Agreement.

Universal Citation:
NY LLC L § 417 (2023)
Learn more This media-neutral citation is based on the American Association of Law Libraries Universal Citation Guide and is not necessarily the official citation.
§  417.  Operating  agreement.  (a)  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  relating  to  (i)
the  business  of the limited liability company, (ii) the conduct of its
affairs and  (iii)  the  rights,  powers,  preferences,  limitations  or
responsibilities  of  its members, managers, employees or agents, as the
case may be.

The operating agreement may set forth a provision eliminating or limiting the personal liability of managers to the limited liability company or its members for damages for any breach of duty in such capacity, provided that no such provision shall eliminate or limit:

(1) the liability of any manager if a judgment or other final adjudication adverse to him or her establishes that his or her acts or omissions were in bad faith or involved intentional misconduct or a knowing violation of law or that he or she personally gained in fact a financial profit or other advantage to which he or she was not legally entitled or that with respect to a distribution the subject of subdivision (a) of section five hundred eight of this chapter his or her acts were not performed in accordance with section four hundred nine of this article; or

(2) the liability of any manager for any act or omission prior to the adoption of a provision authorized by this subdivision.

(b) The operating agreement of a limited liability company may be amended from time to time as provided therein; provided, however, that, except as otherwise provided in the operating agreement or the articles of organization, without the written consent of each member adversely affected thereby, (i) no amendment of the operating agreement or (ii) to the extent any provision concerning (A) the obligations of any member to make contributions, (B) the allocation for tax purposes of any items of income, gain, loss, deduction or credit, (C) the manner of computing the distributions of any member or (D) the compromise of an obligation of a member to make a contribution is contained in the articles of organization, no amendment of such provision in the articles of organization, shall be made that (i) increases the obligations of any member to make contributions, (ii) alters the allocation for tax purposes of any items of income, gain, loss, deduction or credit, (iii) alters the manner of computing the distributions of any member or (iv) allows the obligation of a member to make a contribution to be compromised by consent of less than all the members.

(c) An operating agreement may be entered into before, at the time of or within ninety days after the filing of the articles of organization. Regardless of whether such agreement was entered into before, at the time of or after such filing, such agreement, may be effective upon the formation of the limited liability company or at such later time or date as provided in the operating agreement; provided, however, under no circumstances shall an operating agreement become effective prior to the formation of such company.

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