North Carolina Single-Member LLC Operating Agreement

The LLC is formed by filing Articles of Organization with the North Carolina Secretary of State (N.C. Gen. Stat. Sections 57D-2-20, 57D-2-21) and is governed by the North Carolina Limited Liability Company Act, Chapter 57D. Chapter 57D does not require the Operating Agreement to contain an acknowledgment clause; the Agreement is simply subject to the Chapter's mandatory provisions.

Establishes that the Operating Agreement governs the internal affairs of the LLC and the rights, duties, and obligations of members, managers, and the company itself, subject to mandatory provisions of NC law.

Confirms that members and managers are not personally liable for the debts, obligations, or liabilities of the LLC solely by reason of being members or managers.

By default, every Member of a North Carolina LLC is also a manager, with equal rights to participate in management, unless the Operating Agreement itself provides that Members are not automatically managers (N.C. Gen. Stat. Section 57D-3-20). Unlike some states, North Carolina does not use a member-managed/manager-managed election in the Articles of Organization; the Operating Agreement controls.

A Member may contribute money, other property, services rendered, or another benefit to the LLC, including a promissory note or other obligation to contribute in the future (N.C. Gen. Stat. Section 57D-4-01). North Carolina law does not require a Member to make any contribution at all, and does not prescribe a valuation process for non-cash contributions; the Operating Agreement sets those terms.

North Carolina's LLC Act does not have a separate profits-and-losses allocation rule; the applicable default is in the distributions statute. Absent a contrary Operating Agreement provision, distributions are made in proportion to each Member's aggregate capital contributions relative to all Members' contributions (N.C. Gen. Stat. Section 57D-4-03, not Section 57D-4-02, which covers a Member's liability for an unfulfilled contribution promise).

Interim distributions before dissolution, and liquidating distributions after dissolution, are made in proportion to each Member's aggregate capital contributions relative to all Members' contributions, absent a contrary Operating Agreement provision (N.C. Gen. Stat. Sections 57D-4-03, 57D-6-08(2)). No distribution may be made if it would leave the LLC unable to pay its debts as they come due, or make liabilities exceed assets (N.C. Gen. Stat. Section 57D-4-05).

Each manager has equal rights to participate in management, and management decisions are controlled by a majority vote of the managers (N.C. Gen. Stat. Section 57D-3-20(b)). Unanimous approval of all Members is required to adopt or amend an Operating Agreement, admit a new Member, sell substantially all assets outside the ordinary course, dissolve outside the statutory grounds, or convert or merge the LLC (N.C. Gen. Stat. Section 57D-3-03).

North Carolina's default rule is the opposite of a restriction: an economic interest is freely transferable in whole or in part (N.C. Gen. Stat. Section 57D-5-02). A transfer only conveys the right to receive distributions; it does not make the transferee a Member or give the transferee management or voting rights unless the Members unanimously approve. Any right of first refusal must be added by the Operating Agreement; the statute does not create one.

North Carolina does not give a Member a general right to voluntarily withdraw capital or resign (N.C. Gen. Stat. Section 57D-5-05). Membership instead ends only on specific triggering events: bankruptcy, death, incompetency, or transfer or abandonment of the Member's entire interest (N.C. Gen. Stat. Section 57D-3-02). Chapter 57D does not itself provide a buyout mechanism; any buyout terms must come from the Operating Agreement.

Establishes each Member's right to inspect and copy specific LLC records on 7 days' written notice, including the Articles of Organization and Operating Agreement, up to 4 years of tax returns or financial statements, a list of current interest owners, and information needed to determine capital interests (N.C. Gen. Stat. Section 57D-3-04). The LLC may redact other Members' information and impose confidentiality conditions.

Sets the standard of conduct for Managers: act in good faith, with the care an ordinarily prudent person in a like position would exercise, and in a manner believed to be in the LLC's best interests (N.C. Gen. Stat. Section 57D-3-21). Unlike many states, North Carolina lets the Operating Agreement modify or fully eliminate this standard, and does not require that change to be in writing (N.C. Gen. Stat. Sections 57D-3-21, 57D-3-31, 57D-4-06).

The LLC must indemnify a Member, Manager, or other company official who is wholly successful in defending a proceeding arising from that role. The LLC must also reimburse and indemnify such a person for obligations incurred in the LLC's authorized business, but only if that person complied with the standards of conduct in N.C. Gen. Stat. Section 57D-3-21, as modified or eliminated by the Operating Agreement (N.C. Gen. Stat. Section 57D-3-31). Chapter 57D does not list separate non-waivable exceptions to indemnification the way some states' statutes do.

Adopting or amending an Operating Agreement requires the approval of all Members (N.C. Gen. Stat. Section 57D-3-03(1)), a unanimous-consent default, not a majority-vote default. Once adopted, an amendment binds every person who is a party to or otherwise bound by the Operating Agreement (N.C. Gen. Stat. Section 57D-2-31(e)).

Provides mechanisms for resolving disputes among members, such as mediation or arbitration, and may specify venue and jurisdiction for any litigation.

North Carolina's LLC Act does not include an anti-dilution statute. Section 57D-5-01 states only that an ownership interest is personal property. Any anti-dilution protection must be created by the Operating Agreement itself; it is not a default statutory right in North Carolina.