Disputes involve management authority, distribution obligations, admission and withdrawal of members, transfer restrictions, and fiduciary duties. LLC statutes permit substantial modification of default rules by agreement.
Delaware permits elimination of fiduciary duties by contract.
Alternative Names:
LLC Operating Agreement Dispute|LLC Governance Dispute
Why it Matters?
Contractual freedom to modify or eliminate fiduciary duties distinguishes LLCs from corporations, and Delaware permits waiver of all fiduciary duties except the implied covenant of good faith. A member relying on fiduciary protection that the agreement eliminated has no claim. Reading the operating agreement rather than assuming corporate-law defaults is therefore the threshold analysis in any LLC dispute.
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Frequently asked questions
Can fiduciary duties be eliminated?
What is the threshold analysis?
