Massachusetts Single-Member LLC Operating Agreement

A Massachusetts LLC is member-managed by default: unless the Operating Agreement provides otherwise, management is vested in the Members. If the Operating Agreement designates one or more Managers instead, the effect is exclusive: only the Manager(s) may manage, control, or execute documents for the LLC, and no Member may do so unless the Agreement provides otherwise (M.G.L. Chapter 156C, Section 24).

A Member's contribution to the Company may be in cash, property, services rendered, or a promissory note or other obligation to contribute cash, property, or services (M.G.L. Chapter 156C, Section 27). The Operating Agreement should record the amount, form, and timing of each Member's contribution.

Absent a contrary Operating Agreement provision, Massachusetts law allocates profits and losses among Members on the basis of the agreed value, as stated in the Company's records, of each Member's contributions received and not returned, not split evenly among Members. The Operating Agreement can set a different split (M.G.L. Chapter 156C, Section 29).

Absent a contrary Operating Agreement provision, cash or other asset distributions are allocated among Members using the same contribution-value-proportional default that governs profit and loss allocation, not an equal split. A Member or Manager who approves a distribution that violates the Operating Agreement's own terms is personally liable to the Company for the excess amount (M.G.L. Chapter 156C, Sections 30 and 35).

The Operating Agreement may grant Members the right to vote separately or by class, and may set notice, meeting, and consent-without-a-meeting procedures. If the Operating Agreement does not address voting rights for a matter, Massachusetts law's default rule controls: the decision of Members who own more than fifty percent of the unreturned contributions is controlling (M.G.L. Chapter 156C, Section 21(d)).

A Member may assign their limited liability company interest, in whole or in part. Unless the Operating Agreement provides otherwise, an assignment does not entitle the assignee to become a Member or exercise any management rights; it entitles the assignee only to receive the distributions the assigning Member would otherwise have received (M.G.L. Chapter 156C, Section 39).

Regardless of any contrary provision in the Operating Agreement, a Member may resign upon not less than six months' prior written notice to each other Member and Manager. This is a statutory floor right the Operating Agreement cannot eliminate, though a Member who resigns in violation of the Agreement's own terms remains liable to the Company for resulting damages (M.G.L. Chapter 156C, Section 36).

A Massachusetts LLC dissolves upon the first to occur of: a time or event specified in the Operating Agreement, the written consent of all Members, or a court-decreed dissolution. Unless the Operating Agreement provides otherwise, a Manager who has not wrongfully caused the dissolution (or, if none, the Members) winds up the Company's affairs, including settling its business, discharging its liabilities, and distributing any remaining assets to Members (M.G.L. Chapter 156C, Sections 43 and 45).

Chapter 156C does not itself set out a standalone default statement of the fiduciary duties Members and Managers owe, unlike some other states' LLC statutes. What the Act provides instead is a waiver mechanism: the certificate of organization or a written Operating Agreement may eliminate or limit personal liability for breach of a duty owed to the Company or another Member or Manager, except where the person is adjudicated not to have acted in good faith in the reasonable belief the action served the Company's best interest (M.G.L. Chapter 156C, Section 8(b)).

The Company may indemnify and hold harmless a Member, Manager, or other person from claims and demands arising from service to the Company. The one statutory exception: no indemnification is available to a person adjudicated, in a proceeding, not to have acted in good faith in the reasonable belief that the action was in the Company's best interest (M.G.L. Chapter 156C, Section 8(a)).

Massachusetts LLCs must keep specific records at their principal office, including a current list of Members' and Managers' names and addresses, the certificate of organization and any amendments, copies of any then-effective written Operating Agreements, and tax returns. These records must be available for inspection and copying by any Member or Manager, at their own expense, on reasonable request during ordinary business hours (M.G.L. Chapter 156C, Section 9).

The Operating Agreement may authorize certain actions, including amending the Agreement itself, without the vote or approval of any Member, if the Agreement so provides. Chapter 156C does not itself set a default amendment-voting threshold; absent such an authorization, the Operating Agreement is where amendment procedures must be defined (M.G.L. Chapter 156C, Section 21(a)).