Operating agreement for LLC: which statement is accurate?

• A. It is optional and has no effect on management.
• B. It must be filed with the secretary of state along with the articles of organization.
• C. Members must adopt a written operating agreement, effective upon formation or later as provided in the agreement.
• D. It cannot address management structure.

Answer: (C)

The important idea is that an LLC’s internal governance rests in a written operating agreement, and in New York, members are required to adopt one. This agreement lays out how the LLC is managed and operated, including who has decision-making authority, how profits and losses are allocated, and rules for transfers or additions of members. It can take effect either at formation or later, as the agreement specifies.

This is the best choice because it captures both the mandatory nature of having a written operating agreement and the fact that it can be effective upon formation or later according to the provisions. It also clarifies that the operating agreement is an internal document and not something filed with the state. It can address management structure, so stating that it cannot address management is not accurate.