Delaware Single-Member LLC Operating Agreement

It is the stated policy of the Delaware Limited Liability Company Act "to give the maximum effect to the principle of freedom of contract and to the enforceability of limited liability company agreements" (6 Del. C. Section 18-1101(b)). This Operating Agreement may accordingly modify, alter, or eliminate nearly all of the Act's default rules, a broader degree of override than most states' LLC statutes permit.

The fiduciary duties of Members and Managers may be expanded, restricted, or eliminated by provisions in this Operating Agreement, except that the implied contractual covenant of good faith and fair dealing may not be eliminated. The Agreement specifies the extent to which Members and Managers owe fiduciary duties to the LLC and to each other.

A Delaware LLC is member-managed by default unless the Operating Agreement provides for management by a manager. Unlike most states' per-member voting default, Delaware vests management in members in proportion to each member's percentage interest in the LLC's profits, with decisions controlled by members owning more than 50% of that interest, unless the Agreement provides otherwise (6 Del. C. Section 18-402).

Absent a contrary Operating Agreement provision, Delaware law allocates profits and losses on the basis of the agreed value, as stated in the Company's records, of each member's contributions, not split evenly among members. The Operating Agreement can set a different split (6 Del. C. Section 18-503).

Unless the Operating Agreement provides otherwise, an assignee of a member's LLC interest has no right to participate in management and does not become a member, even after acquiring the entire interest, except upon the vote or consent of all of the members (6 Del. C. Section 18-702). The Operating Agreement can lower or remove this consent requirement.

Unless the Operating Agreement provides otherwise, a member has no right to resign from a Delaware LLC before its dissolution and winding up. A right to withdraw before dissolution exists only if the Operating Agreement affirmatively creates one and states the events or timing that trigger it (6 Del. C. Section 18-603).

Unless the Operating Agreement sets a fixed term or other dissolution event, a Delaware LLC has perpetual existence. Absent a contrary provision, dissolution otherwise requires the vote of members owning more than two-thirds of the LLC's profits interest. For a single-member LLC, the death of the sole member is a dissolution event unless, within 90 days (or another period the Agreement sets), the member's personal representative agrees to continue the LLC and be admitted as a member (6 Del. C. Sections 18-801 and 18-804).

Delaware law authorizes the LLC to indemnify and hold harmless a member, manager, or other person "from and against any and all claims and demands whatsoever," subject only to whatever standards and restrictions the Operating Agreement itself sets (6 Del. C. Section 18-108). Unlike some states, the statute names no mandatory carve-outs, so the Operating Agreement is where any limits on indemnification, including any advancement of expenses, are actually defined.

A Delaware Operating Agreement may authorize certain actions, including amending the Agreement itself or creating a new class of membership interests, without the vote or approval of any member, if the Agreement so provides. Absent such a provision, Delaware's Act does not itself set a default amendment-voting threshold; the Agreement is where amendment procedures must be defined (6 Del. C. Section 18-302(a)).

An action to interpret, apply, or enforce the Operating Agreement, or the duties, rights, or obligations of members or managers, may be brought in the Delaware Court of Chancery, a specialized business court that decides cases without a jury (6 Del. C. Section 18-111). Many Delaware LLC agreements designate the Court of Chancery as the exclusive forum for this reason.

If establishing a Series LLC, the Operating Agreement must include specific provisions regarding the establishment of series, the segregation of assets and liabilities between series, and the management of each series. Delaware law provides specific requirements for Series LLCs that must be addressed in the Operating Agreement.

Unlike Delaware corporations, a Delaware LLC does not file an annual report. Its only recurring state filing obligation is a flat annual tax, currently billed at $300 for tax year 2025 and due by June 1 each year. Recently enacted legislation (House Bill 400, signed May 21, 2026) raises this tax to $400 for tax year 2026 and later, first payable June 1, 2027. The Operating Agreement should specify who is responsible for ensuring this tax is paid to keep the LLC in good standing.