Massachusetts: LLC Operating Agreement Requirements

Requirements one by one

Massachusetts recognizes written and oral operating agreements

General Laws chapter 156C, § 2 defines an operating agreement as "any written or oral agreement of
the members" about the LLC's affairs and business. Chapter 156C does not impose a general signature,
witness, acknowledgment, or notary condition. It does, however, reserve several consequences for a
written operating agreement, including liability limits under § 8 and specified later-admission
and assignee-admission procedures under §§ 20, 39, and 41.

The agreement is legally optional. The Act repeatedly states what happens when it does not address a
matter: § 21 supplies the member-voting rule, § 24 supplies management and authority rules, and
§§ 29–30 supply the profit, loss, and distribution formulas.

Formation and admission are separate statutory events

The LLC forms when its certificate of organization is filed, or on a later date specified in that
certificate (G.L. c. 156C, § 12). Under § 20, an initial member is admitted at the later of formation
or the time set by and in compliance with the operating agreement. The Act sets no general deadline
for adopting an agreement.

A Massachusetts domestic LLC may have "1 or more members" under § 2. Chapter 156C does not add a
separate sole-member signature rule or a deemed-assent rule for later members. After formation, a
person taking an interest directly from the company is admitted as the written operating agreement
provides or, if it does not provide, with every member's consent (§ 20).

Manager status changes both private control and the public certificate

Section 24 defaults to member management. If the operating agreement designates at least one manager,
the manager manages, controls, executes documents, and acts for the LLC unless the agreement changes
those rules. With no manager, the members hold those powers. A member or manager may also delegate
some or all of those powers unless the agreement says otherwise.

Manager status has a public-record consequence. Section 12 requires the formation certificate to name
each existing manager, and § 13 requires an amendment when managers are first designated or change.
Section 18 makes the certificate public notice of the facts that § 12 requires it to state.

Contributions drive the fallback vote and economic rules

If the operating agreement supplies no voting rights, § 21 makes the decision of members owning more
than 50% of unreturned contributions controlling. That is not a one-member-one-vote rule and not
automatically a percentage-interest schedule drafted for tax or deal purposes.

Sections 29 and 30 separately let the agreement set allocations of profits and losses and distributions.
If it is silent, each formula uses the agreed value recorded for contributions actually received and
not returned. The agreement may therefore replace either statutory formula, and it may use different
negotiated formulas for allocations and cash distributions.

An assignment does not itself transfer management rights

Section 39 makes an LLC interest assignable unless the agreement restricts it, but the assignee receives
no management right from assignment alone. Management participation requires approval of all members
other than the assignor or compliance with a written-agreement procedure. Section 41 uses the same two
routes for admitting the assignee as a member.

Unless the agreement changes the result, assigning the whole interest ends the assignor's membership,
while the assignee still holds only the assigned economic rights until separately admitted. That split
is easy to miss in a transfer clause.

Massachusetts uses specific statutory limits, not a modern nonwaivable list

Chapter 156C does not contain the long, numbered nonwaivable list found in newer uniform LLC acts.
Section 63 permits the operating agreement to expand or restrict duties and liabilities, and § 8 lets
the certificate or a written agreement eliminate or limit personal liability for breach of duty.

The flexibility has statutory boundaries. Section 8 bars indemnification after an adjudication that the
person did not act in good faith in the reasonable belief that the action served the LLC's best interest.
Section 10 gives members and managers information rights subject to reasonable standards. Section 44
authorizes judicial dissolution when it is not reasonably practicable to operate consistently with the
certificate or agreement.

The agreement stays private, but written copies and public changes matter

The operating agreement is not one of the documents § 12 requires to be filed. Section 9 instead
requires the LLC to keep copies of its effective written operating agreements at its Massachusetts
office, along with contribution, distribution, and dissolution information not contained in a written
agreement.

Section 21 lets the operating agreement establish an amendment method, even one that permits action
without a member vote. If it supplies no member-voting rule, the contribution-majority default in
§ 21(d) controls. Amendment of the private agreement remains distinct from the § 13 duty to update a
materially inaccurate certificate and changes to public manager or authorized-signatory information.

What trips people up

• "Oral agreement allowed" does not mean every LLC term can safely remain oral. Chapter 156C itself
  requires a written operating agreement for several liability, later-admission, and transfer procedures.
• Naming a manager only in the private agreement leaves a separate filing job. Sections 12 and 13 require
  the public certificate to identify managers and to be amended when manager status changes.
• A full assignment can end the assignor's membership without making the assignee a member. Sections 39
  and 41 separate economic ownership from management and membership rights.

Common questions

Can a new member join without contributing money or property?

Yes. Section 20(c) expressly allows admission and receipt of an LLC interest without a contribution or
an obligation to contribute. The admission still must follow the applicable agreement or consent route.

Can profits and cash distributions use different formulas?

Yes. Sections 29 and 30 address them separately and let the operating agreement set each formula. If the
agreement is silent, both defaults use the recorded value of received, unreturned contributions.

Can a member or manager delegate authority?

Yes, unless the operating agreement says otherwise. Section 24(d) permits delegation of some or all
management, control, document-execution, and acting powers without ending the delegator's member or
manager status.

Statutes and sources

• Mass. Gen. Laws ch. 156C, § 1 and § 2(5), (7), (9) — names the Massachusetts Limited Liability Company Act,
  defines a domestic LLC as having one or more members,
  defines a manager through the operating agreement, and defines an operating agreement as "any written
  or oral agreement of the members." Official text
  (accessed July 26, 2026).
• Mass. Gen. Laws ch. 156C, § 8(a)–(b) — permits written liability limits and indemnification, but
  bars indemnification after the specified adverse good-faith adjudication. Official text
  (accessed July 26, 2026).
• Mass. Gen. Laws ch. 156C, § 9(a) and § 10 — requires internal records and gives members and managers
  information rights subject to reasonable standards. Section 9
  and section 10
  (accessed July 26, 2026).
• Mass. Gen. Laws ch. 156C, § 12(a)–(b), § 13(b)–(c), and § 18 — governs formation, manager information, certificate
  amendments, and public notice. Section 12,
  section 13, and
  section 18
  (accessed July 26, 2026).
• Mass. Gen. Laws ch. 156C, § 20(a)–(c) and § 21(a), (d) — governs admission, agreement-set amendment and voting rules,
  and the contribution-majority fallback. Section 20
  and section 21
  (accessed July 26, 2026).
• Mass. Gen. Laws ch. 156C, § 24(a)–(d) — supplies management, authority, and delegation defaults.
  Official text
  (accessed July 26, 2026).
• Mass. Gen. Laws ch. 156C, § 29(a) and § 30 — supplies profit, loss, and distribution defaults.
  Section 29 and
  section 30
  (accessed July 26, 2026).
• Mass. Gen. Laws ch. 156C, § 39(a)–(b) and § 41(a)–(b) — separates assignment of economic rights from management and
  membership admission. Section 39
  and section 41
  (accessed July 26, 2026).
• Mass. Gen. Laws ch. 156C, § 44 and § 63(b) — provides judicial dissolution and permits restriction of
  member and manager duties and liabilities. Section 44
  and section 63
  (accessed July 26, 2026).