Kansas Single-Member LLC Operating Agreement

This Operating Agreement shall be consistent with the Articles of Organization filed with the Kansas Secretary of State. In the event of any conflict between this Agreement and the Articles of Organization, the Articles of Organization shall control.

Kansas law defines an operating agreement broadly, as any written, oral, or implied agreement governing the LLC, and it is enforceable even if the Company or a Member has not separately executed it (K.S.A. 17-7663). It is the stated policy of Kansas's LLC Act to give maximum effect to freedom of contract and to the enforceability of operating agreements (K.S.A. 17-76,134(b)).

Members and managers are not personally liable for the debts, obligations, or liabilities of the LLC solely by reason of being a member or manager; those liabilities belong solely to the LLC (K.S.A. 17-7688). A member or manager may still voluntarily assume personal liability for a specific LLC debt or obligation, but only by agreeing to do so in the operating agreement or another contract.

Unless the operating agreement provides otherwise, a Kansas LLC is member-managed, with management vested in the members in proportion to each member's current percentage interest in the LLC's profits, and ordinary-course decisions controlled by members owning more than 50% of that profit interest, not a simple per-member majority (K.S.A. 17-7693). The operating agreement may instead vest management in one or more managers.

Members and managers owe fiduciary duties of loyalty and care to the LLC and other members. The Operating Agreement may expand, restrict, or eliminate certain fiduciary duties to the extent permitted by Kansas law, but may not eliminate the implied contractual covenant of good faith and fair dealing.

Unless the operating agreement provides otherwise, Kansas law allocates profits and losses on the basis of the agreed value of each member's contributions to the LLC, not split evenly among members (K.S.A. 17-76,101). The operating agreement can set a different split.

Unless the operating agreement provides otherwise, an assignee of a membership interest becomes a member only with the consent of all of the other members (K.S.A. 17-76,114). If a member dies or is adjudged incompetent, that member's personal representative may exercise the member's rights, including any right under the operating agreement for an assignee to become a member, for the purpose of settling the member's estate (K.S.A. 17-76,115).

For any LLC whose articles of organization became effective after June 30, 2014, a member may not resign from the LLC before its dissolution and winding up unless the operating agreement provides otherwise, the opposite of an at-will withdrawal default (K.S.A. 17-76,106). LLCs formed on or before June 30, 2014 remain under the prior rule, under which a resigning member becomes an assignee entitled to the fair value of their interest (K.S.A. 17-76,107).

A Kansas LLC dissolves on the first to occur of several events, including a time or event stated in the operating agreement, a vote of members owning at least two-thirds of the profit interest, or the LLC having no remaining members (K.S.A. 17-76,116). A member's death, retirement, resignation, expulsion, or bankruptcy does not itself dissolve the LLC; if the sole or last member ceases to be a member, a successor may be admitted within 90 days to avoid dissolution, unless the operating agreement provides otherwise.

Kansas's LLC Act does not mandate a fixed list of records an LLC must keep. What it provides is a member's right, on reasonable written demand stating the purpose, to obtain company books, records, and other information reasonably related to the member's interest (K.S.A. 17-7690). The LLC must maintain a current record of the name and address of each member and manager, and may keep records in electronic form.

A Kansas LLC has the power to indemnify a member, manager, or other person against claims and demands, subject to the standards and restrictions set in the operating agreement (K.S.A. 17-7670). Indemnification is mandatory, not merely discretionary, for a member, manager, or officer who is successful on the merits or otherwise in defending an action brought by reason of holding that position, covering expenses and attorney fees actually and reasonably incurred.

Kansas's LLC Act does not itself set a default vote or consent threshold for amending the operating agreement; the agreement's own terms control, reflecting the Act's stated policy of giving maximum effect to freedom of contract and to the enforceability of operating agreements (K.S.A. 17-76,134(b)). The operating agreement should state its own amendment procedure rather than rely on an unstated statutory default.

Kansas's original Uniform Arbitration Act (former K.S.A. 5-401 et seq.) was repealed effective July 1, 2018, and replaced by the Kansas Revised Uniform Arbitration Act, K.S.A. 5-423 et seq. An operating agreement that specifies mediation, arbitration, or litigation for resolving member disputes should reference the current Act, not the repealed sections.

Kansas's LLC Act allows an operating agreement to establish one or more series with segregated assets and liabilities. The liability shield between series applies only if all of the following are true: the operating agreement provides for the series and its liability limitation, records for each series are maintained separately, the articles of organization give notice of the limitation, and the LLC has filed a certificate of designation for that series with the Secretary of State (K.S.A. 17-76,143). Missing any one of these conditions defeats the inter-series liability shield.