§ 417 — Operating agreement

§ 417. Operating agreement. (a) Subject to the provisions of this\nchapter, the members of a limited liability company shall adopt a\nwritten operating agreement that contains any provisions not\ninconsistent with law or its articles of organization relating to (i)\nthe business of the limited liability company, (ii) the conduct of its\naffairs and (iii) the rights, powers, preferences, limitations or\nresponsibilities of its members, managers, employees or agents, as the\ncase may be.\n The operating agreement may set forth a provision eliminating or\nlimiting the personal liability of managers to the limited liability\ncompany or its members for damages for any breach of duty in such\ncapacity, provided that no such provision shall eliminate or limit:\n (1) the liability of any manager if a judgment or other final\nadjudication adverse to him or her establishes that his or her acts or\nomissions were in bad faith or involved intentional misconduct or a\nknowing violation of law or that he or she personally gained in fact a\nfinancial profit or other advantage to which he or she was not legally\nentitled or that with respect to a distribution the subject of\nsubdivision (a) of section five hundred eight of this chapter his or her\nacts were not performed in accordance with section four hundred nine of\nthis article; or\n (2) the liability of any manager for any act or omission prior to the\nadoption of a provision authorized by this subdivision.\n (b) The operating agreement of a limited liability company may be\namended from time to time as provided therein; provided, however, that,\nexcept as otherwise provided in the operating agreement or the articles\nof organization, without the written consent of each member adversely\naffected thereby, (i) no amendment of the operating agreement or (ii) to\nthe extent any provision concerning (A) the obligations of any member to\nmake contributions, (B) the allocation for tax purposes of any items of\nincome, gain, loss, deduction or credit, (C) the manner of computing the\ndistributions of any member or (D) the compromise of an obligation of a\nmember to make a contribution is contained in the articles of\norganization, no amendment of such provision in the articles of\norganization, shall be made that (i) increases the obligations of any\nmember to make contributions, (ii) alters the allocation for tax\npurposes of any items of income, gain, loss, deduction or credit, (iii)\nalters the manner of computing the distributions of any member or (iv)\nallows the obligation of a member to make a contribution to be\ncompromised by consent of less than all the members.\n (c) An operating agreement may be entered into before, at the time of\nor within ninety days after the filing of the articles of organization.\nRegardless of whether such agreement was entered into before, at the\ntime of or after such filing, such agreement, may be effective upon the\nformation of the limited liability company or at such later time or date\nas provided in the operating agreement; provided, however, under no\ncircumstances shall an operating agreement become effective prior to the\nformation of such company.\n