Maryland: LLC Operating Agreement Requirements
The short answer
Maryland does not require an ordinary domestic LLC to adopt a written operating agreement. Unless the articles require a writing, the agreement may be oral; all initial members must agree to it, a one-member agreement is enforceable, the LLC need not sign, and present or later members and assignees are bound without executing it. If the agreement is silent, members manage and act for the LLC, ordinary voting and economics follow profit interests derived from capital contribution values, later admission is unanimous, and an assignment initially transfers only economic rights.
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This is the general rule in Maryland. Ezel applies current Maryland law to your specific facts and answers with citations to the statutes.
| Governing law and document name | Md. Code, Corporations and Associations Title 4A (Limited Liability Companies); 'operating agreement' (§§ 4A-101(q), 4A-402) |
|---|---|
| Required or optional | Optional; members 'may enter into' an agreement, and Title 4A supplies defaults unless otherwise agreed (§§ 4A-402, 4A-403, 4A-503) |
| Permitted form and signatures | Need not be written unless articles require; initial agreement needs all members' agreement, not necessarily signatures. Statutory unanimous consents are written (§§ 4A-402(b), 4A-404) |
| Adoption timing and effect | No express adoption deadline or preformation-effect rule; LLC forms on articles acceptance, and initial agreement requires all then-members (§§ 4A-202(b), 4A-402(b), 4A-601(a)) |
| Single member and assent | One-member agreement enforceable; LLC need not execute but is bound. Every present/later member and assignee is bound without execution (§ 4A-402(d)) |
| Management and authority defaults | Members manage and are ordinary-course agents unless otherwise agreed; agreement may grant exclusive management to nonmembers. Filed articles can limit member authority with presumed notice (§§ 4A-401–402) |
| Voting, economic, and transfer defaults | Votes track profit interests; ordinary matters need a majority. Profits/losses track capital contribution value and distributions track profits; later admission unanimous; assignment conveys economics only (§§ 4A-403, 4A-503, 4A-601, 4A-603–604) |
| Nonwaivable rules and duties | No numbered nonwaivable or fiduciary-duty list. Agreement is subject to articles and law; indemnity cannot cover willful misconduct/recklessness, and liability shield, reasonable inspection, enforcement, and dissolution remain statutory (§§ 4A-203(14), 4A-301, 4A-402(d), 4A-406, 4A-903) |
| Amendment, filing, and records | Agreement method controls; otherwise unanimous. Amendment may be oral unless nonunanimous or an unadmitted assignee exists. Agreement is private; written amendments go to nonconsenters and copies are inspectable (§§ 4A-402(c), 4A-406) |
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Requirements one by one
The agreement is optional and generally may be oral
Section 4A-402 says members “may enter into” an operating agreement and that it need not be in
writing unless the articles specifically require a writing. The initial agreement must be agreed
to by every person who is then a member, but Title 4A imposes no general witness, acknowledgment,
notary, or handwritten-signature condition for the agreement itself.
Maryland does not state a separate adoption deadline or expressly give a preformation agreement
effect. The LLC forms when the Department accepts the articles, or at a later time stated in them
(§ 4A-202). Initial membership begins at formation or a later agreement-specified time under
§ 4A-601.
Sole members, the LLC, later members, and assignees can be bound without signing
Section 4A-402(d) expressly validates a one-member operating agreement. The LLC need not execute
the agreement but is bound by it. A duly adopted or amended agreement also binds every person who
is or becomes a member or assignee, whether or not that person executed it.
That deemed binding effect is broader than the later-admission rule. Under § 4A-601, a person who
acquires an interest directly from the LLC becomes a member by satisfying the agreement or, if it
is silent, with unanimous member consent.
Member management and agency are the silent defaults
Section 4A-402 permits an agreement to grant exclusive management authority to nonmembers. Without
such a term, § 4A-401 treats each member as an ordinary-course agent. An act outside the usual course
does not bind the LLC unless the LLC authorizes it.
A private authority restriction does not create the same outsider-facing presumption as the articles.
If the articles state that members' authority solely from membership is limited, persons dealing with
a member are presumed to know that limitation under § 4A-401(a)(3).
Profit interests drive votes; contribution values drive allocations
Section 4A-403 weights member votes by profit interests and requires at least a majority of those
interests for ordinary decisions. Disposition of substantially all business or property, merger, and
conversion default to two-thirds. Bankruptcy, changing allocations or distributions, and acts making
ordinary business impossible default to unanimous written consent, although § 4A-404 permits the
agreement to alter those consent requirements.
The economic chain begins in § 4A-503: profits and losses default in proportion to capital contribution
values, and distributions default in proportion to profit shares. These formulas are related but should
not be replaced in a summary by a generic “ownership percentage.”
Assignment initially transfers only the economic interest
Section 4A-603 defaults assignment to an economic interest only. The assignee does not become a member
or receive voting, management, agency, or other noneconomic rights. An assignee becomes a member through
the agreement or unanimous member consent under § 4A-604.
Maryland adds a consequence worth drafting around: unless otherwise agreed, assignment of all of a
member's economic interest ends that person's membership and forfeits the noneconomic interest, even
though the assignee does not automatically become a member.
Title 4A has targeted statutory floors rather than a modern duty list
Title 4A does not state a numbered list of nonwaivable operating-agreement terms or a statutory formula
for fiduciary-duty modification. Section 4A-402 allows the agreement to regulate any aspect of LLC
affairs, business, or member relations, but only if consistent with the articles and other law.
The Act separately bars indemnification for willful misconduct or recklessness (§ 4A-203), protects
members from entity obligations solely because of membership (§ 4A-301), permits member inspection
subject to reasonable standards (§ 4A-406), and preserves judicial enforcement and dissolution routes
in §§ 4A-402 and 4A-903.
Amendment form depends on who approved and who holds assigned economics
The agreement's amendment method controls. If it provides none, every member must agree. An amendment
generally need not be written, but § 4A-402(c) requires a writing signed by an authorized person when
the amendment lacks unanimous member consent or an economic interest has been assigned to an unadmitted
assignee.
A written amendment must be delivered to each nonconsenting member and unadmitted assignee. The operating
agreement itself is not the public formation filing; § 4A-406 instead gives members inspection rights
over the agreement and all amendments.
What trips people up
- “Need not be in writing” does not eliminate every writing rule. Statutorily required unanimous
consents are written, and two amendment situations require a signed writing. - A private member-authority limit and a filed articles statement have different effects on outsiders.
- Assigning all economic rights can end the assignor's membership without admitting the assignee.
Common questions
Must every member sign the initial agreement?
Not necessarily. Every initial member must agree to it, but § 4A-402 does not impose a general signature
condition unless the articles require a writing.
Can a nonmember manage the LLC?
Yes. Section 4A-402(a)(1) expressly permits the agreement to give exclusive management, control, and
operation authority to persons who are not members.
Can an amendment bind someone who did not execute it?
Yes. A duly adopted amendment binds members and assignees without execution, but the approval, writing,
signature, and delivery rules in § 4A-402(c) still must be followed.
Statutes and sources
- Md. Code, Corps. & Ass'ns §§ 4A-101, 4A-202 — defines the agreement and “unless otherwise
agreed,” and fixes the LLC's formation time. Official § 4A-101
and official § 4A-202
(accessed July 26, 2026). - Md. Code, Corps. & Ass'ns §§ 4A-203–204, 4A-301 — governs indemnification, the articles'
authority statement, articles amendment, and the entity-liability shield. Official § 4A-203,
official § 4A-204, and
official § 4A-301
(accessed July 26, 2026). - Md. Code, Corps. & Ass'ns §§ 4A-401–404, 4A-406 — governs member agency, agreement scope and
assent, voting, written consents, amendments, and inspection. Official § 4A-401,
official § 4A-402,
official § 4A-403,
official § 4A-404, and
official § 4A-406
(accessed July 26, 2026). - Md. Code, Corps. & Ass'ns §§ 4A-503, 4A-601, 4A-603–604 — supplies economic, admission, and
assignment defaults. Official § 4A-503,
official § 4A-601,
official § 4A-603, and
official § 4A-604
(accessed July 26, 2026). - Md. Code, Corps. & Ass'ns § 4A-903 — preserves the member's judicial-dissolution route.
Official § 4A-903
(accessed July 26, 2026).
Source links
Every statute quoted above, linked, with the date we checked it.
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