LLC Operating Agreement Requirements in Hawaii

At a glance

Requirements one by one

Governing law and document name

Hawaii Revised Statutes chapter 428 is the Hawaii Uniform Limited Liability Company Act. HRS § 428-101 defines the operating agreement as the agreement under § 428-103 concerning relations among members, managers, and the LLC, including later amendments.

Required or optional

The agreement is optional. HRS § 428-103(a) says all members “may enter into” one and makes Chapter 428 the fallback for a matter the agreement does not address.

Permitted form and signatures

HRS § 428-103(a)'s agreement rule states no general writing or signature condition. HRS § 428-408(c) separately addresses an agreement “in record form” and lets a member request a copy by signed record. Chapter 428 states no agreement-level witness, acknowledgment, or notarization condition.

Do not transfer that flexibility to every related act. HRS § 428-404(d)-(e), for example, requires a signed record for written action in lieu of a required meeting and a signed appointment instrument for a proxy.

Adoption timing and effect

HRS § 428-202(b) says the LLC's legal existence begins when its articles are filed. HRS § 428-103 states no general adoption deadline and no separate rule giving preformation terms effect before the LLC exists. Until an agreement changes a default, subsection (a) makes Chapter 428 control.

Single member and assent

HRS § 428-202(a) expressly permits a company consisting of one member. That sole member is all of the company's members for § 428-103(a)'s agreement rule.

For a later owner, HRS §§ 428-502 and 428-503 separate admission from economics. A transferee initially gets only the transferred distributions. Under HRS § 428-503(a)-(d), the transferee becomes a member only under authority in the agreement or with all other members' consent; once admitted, the transferee is subject to the agreement.

Management and authority defaults

HRS § 428-101 and HRS § 428-203(a)-(c) make member management the default. Manager management requires that designation in the filed articles, not merely a private selection in the operating agreement.

HRS § 428-404 gives members equal management rights and lets a majority of members decide ordinary business matters. In a manager-managed company, the manager or managers hold exclusive management authority and a manager majority decides. The statute reserves listed matters for all-member consent, including amending the agreement, making an interim distribution, admitting a new member, and disposing of substantially all company property.

Authority follows that public structure. HRS § 428-301(a)-(b) makes each member an ordinary-course agent in a member-managed company. In a manager-managed company, membership alone creates no agency; each manager has ordinary-course authority instead.

Voting, economic, and transfer defaults

Hawaii counts people, not ownership percentages, for its ordinary management default. HRS § 428-404 gives each member or manager equal rights and uses a majority of those people for ordinary decisions.

HRS § 428-405(a) separately makes pre-dissolution distributions equal. HRS § 428-404(c) requires all-member consent to make an interim distribution and to admit a new member. HRS §§ 428-502 and 428-503 keep a mere transferee outside management and information rights unless the transferee is admitted as a member.

Nonwaivable rules and duties

HRS § 428-103(b) supplies the contract floor. An agreement cannot unreasonably restrict information, eliminate loyalty or good faith, unreasonably reduce care, vary the specified judicial-expulsion and winding-up rules, or restrict Chapter 428 rights held by protected third parties.

HRS § 428-409 defines loyalty, care, and good faith. Loyalty may be narrowed by specific, not-manifestly-unreasonable categories or a full-disclosure ratification method; care may be reduced only reasonably; and good-faith performance standards may be set only if not manifestly unreasonable.

The preserved court rules matter. HRS § 428-601(5) permits judicial expulsion for specified wrongful conduct or material breach, while HRS § 428-801(3)-(5) preserves illegality and judicial winding-up events. HRS § 428-407(a) can also make a member or manager personally liable for an unlawful distribution when the § 428-409 duty standard was not met.

Amendment, filing, and records

HRS § 428-404(c)(1) defaults to unanimous amendment. The private agreement and public articles do different jobs: HRS § 428-203(b)-(c) permits agreement terms in the articles and makes the agreement control an inconsistency among insiders, while the articles protect an outsider who detrimentally relies on them. Article amendments are separately filed under HRS § 428-204.

If the agreement is in record form, HRS § 428-408(c) lets a member demand a copy at the company's expense. Information and record access cannot be unreasonably restricted under HRS § 428-103(b)(1).

What trips people up

A manager-managed clause needs matching articles. Chapter 428's definition keys manager management to the filed articles, so a private selection alone does not change the statutory public form or agency structure.

The fallback math is equal, not percentage-based. Equal management rights and equal distributions apply unless the agreement replaces them. A capital schedule by itself should not be mistaken for the statutory voting or distribution rule.

A transfer is not automatic membership. The transferee receives economic rights first. Management, voting, and ordinary information rights require admission under HRS § 428-503.

Common questions

Can members approve an action without holding a meeting? Yes. HRS § 428-404(d) permits action requiring member or manager consent with or without a meeting, subject to its signed-record rule for written action in lieu of a required meeting.

Can a member vote through a proxy? Yes. HRS § 428-404(e) permits a member or manager to appoint a proxy through a signed appointment instrument.

Can a transferee ever seek dissolution without becoming a member? In the limited circumstances stated in HRS § 428-503(e)(3), a nonmember transferee may seek the equitable winding-up determination described in HRS § 428-801(5).

Statutes and sources

• HRS §§ 428-101 and 428-103 — document and management-form definitions, statutory defaults, and nonwaivable limits. https://www.capitol.hawaii.gov/hrscurrent/vol08_Ch0401-0429/hrs0428/HRS_0428-0101.htm and https://www.capitol.hawaii.gov/hrscurrent/vol08_Ch0401-0429/hrs0428/HRS_0428-0103.htm (accessed 2026-07-27)
• HRS §§ 428-202 to -204 — formation, articles, manager-managed designation, insider/outsider conflicts, and article amendments. https://www.capitol.hawaii.gov/hrscurrent/vol08_Ch0401-0429/hrs0428/HRS_0428-0202.htm, https://www.capitol.hawaii.gov/hrscurrent/vol08_Ch0401-0429/hrs0428/HRS_0428-0203.htm, and https://www.capitol.hawaii.gov/hrscurrent/vol08_Ch0401-0429/hrs0428/HRS_0428-0204.htm (accessed 2026-07-27)
• HRS § 428-301 — member and manager agency. https://www.capitol.hawaii.gov/hrscurrent/vol08_Ch0401-0429/hrs0428/HRS_0428-0301.htm (accessed 2026-07-27)
• HRS §§ 428-404 to -409 — management, voting, distributions, information, unlawful-distribution liability, and duties. https://www.capitol.hawaii.gov/hrscurrent/vol08_Ch0401-0429/hrs0428/HRS_0428-0404.htm, https://www.capitol.hawaii.gov/hrscurrent/vol08_Ch0401-0429/hrs0428/HRS_0428-0405.htm, https://www.capitol.hawaii.gov/hrscurrent/vol08_Ch0401-0429/hrs0428/HRS_0428-0407.htm, https://www.capitol.hawaii.gov/hrscurrent/vol08_Ch0401-0429/hrs0428/HRS_0428-0408.htm, and https://www.capitol.hawaii.gov/hrscurrent/vol08_Ch0401-0429/hrs0428/HRS_0428-0409.htm (accessed 2026-07-27)
• HRS §§ 428-502 and -503 — economic-only transfer and member admission. https://www.capitol.hawaii.gov/hrscurrent/vol08_Ch0401-0429/hrs0428/HRS_0428-0502.htm and https://www.capitol.hawaii.gov/hrscurrent/vol08_Ch0401-0429/hrs0428/HRS_0428-0503.htm (accessed 2026-07-27)
• HRS §§ 428-601 and 428-801 — judicial expulsion and winding-up grounds. https://www.capitol.hawaii.gov/hrscurrent/vol08_Ch0401-0429/hrs0428/HRS_0428-0601.htm and https://www.capitol.hawaii.gov/hrscurrent/vol08_Ch0401-0429/hrs0428/HRS_0428-0801.htm (accessed 2026-07-27)