LLC Operating Agreement Requirements in North Dakota

At a glance

Requirements one by one

Governing law and document name

North Dakota's statute is the North Dakota Uniform Limited Liability Company Act, N.D.C.C. ch. 10-32.1. Section 10-32.1-01 supplies that name, and § 10-32.1-02(36) calls the members' internal arrangement an operating agreement regardless of its label.

Required or optional

North Dakota does not command an ordinary LLC to adopt an agreement. Instead, § 10-32.1-13(1) says what an agreement may govern, and subsection (2) supplies the consequence of silence: “To the extent the operating agreement does not otherwise provide ... this chapter governs the matter.”

Permitted form and signatures

Section 10-32.1-02(36) recognizes an agreement that is “oral, in a record, implied, or in any combination thereof.” A record may be tangible or electronic, and § 10-32.1-03 gives electronic records and signatures the same legal effect when a writing or signature is otherwise required.

Because oral and implied agreements qualify, the LLC Act has no general rule requiring every operating agreement to be signed, witnessed, acknowledged, or notarized. Another law can still require a signed or recorded instrument for a particular transaction.

Adoption timing and effect

North Dakota states the preformation rule directly. Under § 10-32.1-14(3), two or more intended initial members may agree that their terms will become the operating agreement “upon the formation of the company”; an intended sole member may do the same.

Under § 10-32.1-20(4), the LLC forms when the articles of organization are filed, or on the articles' stated later date. The Act sets no separate deadline for a later agreement, so its defaults govern until valid terms replace them.

Single member and assent

The definition in § 10-32.1-02(36) expressly includes a sole member. Section 10-32.1-14 then binds the LLC whether or not the company manifested assent and deems each person who becomes a member to assent to the agreement.

Formation alone does not make someone a member. Section 10-32.1-20(4)(d) preserves agreements made before or after formation that determine who becomes a member in connection with formation.

Management and authority defaults

Under § 10-32.1-39(1), the LLC defaults to member management unless the agreement uses manager-managed, board-managed, or similar language. For a member-managed LLC created after July 31, 2017, members vote in proportion to their interests in pre-dissolution distributions. A majority of that voting power decides ordinary-course disputes, while an outside-the-ordinary-course act requires all members.

The internal management rule is not an automatic agency rule. Section 10-32.1-23 says a member is not the LLC's agent solely because of membership. Under § 10-32.1-24, the LLC may file a statement granting or limiting authority for transactions with nonmembers, including real-property transfers.

Voting, economic, and transfer defaults

North Dakota's post-2017 defaults use two related measures. Section 10-32.1-39(2)(b) allocates member voting by interests in distributions, while §§ 10-32.1-30(5) and 10-32.1-30.1 allocate interim distributions and profits and losses by the value of contributions. The articles or operating agreement may replace those rules.

Section 10-32.1-27(4) follows the agreement's admission route; if it supplies none, later admission generally requires all-member consent. A transfer under § 10-32.1-44 carries the assigned distribution right but does not by itself give the transferee management, conduct, or ordinary information rights.

Nonwaivable rules and duties

Under § 10-32.1-13(4), if not manifestly unreasonable, an agreement may restrict or eliminate specified aspects of loyalty, alter care without authorizing intentional misconduct or a knowing legal violation, alter other fiduciary duties, and set standards for good-faith performance. It may not eliminate the contractual good-faith obligation itself.

The same section bars unreasonable restrictions on § 10-32.1-42 information rights and member actions, protects the court's dissolution power, and preserves rights of people outside the agreement. Section 10-32.1-41 states the underlying loyalty, care, and good-faith duties. Section 10-32.1-50 preserves court relief for unlawful, impracticable, fraudulent, or oppressive operation.

Amendment, filing, and records

If the agreement sets no different method, § 10-32.1-39 makes amendment unanimous. Section 10-32.1-15(1) also enforces a required nonparty approval or condition, making an amendment ineffective if the requirement is not met.

The agreement is not the public formation filing; § 10-32.1-20 requires articles of organization. If another effective filed record conflicts with the agreement, § 10-32.1-15(4) makes the agreement control among members and other insiders, while the filed record controls for an outsider who reasonably relies on it.

Because an agreement may be oral or implied, the Act does not require every LLC to keep a written copy. Section 10-32.1-42 nevertheless lets a member inspect and copy company-maintained records material to the member's rights and duties, subject to reasonable statutory and agreement restrictions.

What trips people up

The creation date changes the default math. LLCs created after July 31, 2017 use distribution interests for voting and contribution value for profits, losses, and distributions. The older equal-share language remains in the chapter for earlier LLCs.

Member management does not itself prove signing authority. The internal management default and third-party authority are separate. Membership alone is not agency; a filed statement of authority can establish or limit outsider-facing power.

A filed record can matter even though the agreement stays private. The agreement controls internally, but an outsider who reasonably relies on a conflicting effective filing may use the filed record.

Common questions

Does filing the articles automatically make the organizer a member? No. Section 10-32.1-20(4)(d) says formation alone does not cause any person to become a member; the parties' agreement and § 10-32.1-27 govern admission.

Can the LLC publish authority for a real-estate signature? Yes. Section 10-32.1-24 permits a filed statement of authority addressing a person's power to transfer company real property or bind the LLC in other transactions.

Can a former member inspect records from the membership period? Section 10-32.1-42(3) permits a dissociated member to demand qualifying information about that period if the statutory good-faith and purpose requirements are met.

Can members approve a distribution that leaves the LLC unable to pay its debts? No. Section 10-32.1-31 bars a distribution that would fail the ordinary-course debt-payment or balance-sheet tests.

Statutes and sources

• N.D.C.C. §§ 10-32.1-01 to 10-32.1-03 — Act name, operating-agreement definition, records, and electronic form. https://ndlegis.gov/cencode/t10c32-1.pdf (accessed 2026-07-27)
• N.D.C.C. §§ 10-32.1-13 to 10-32.1-15 — agreement scope, statutory floors, assent, preformation terms, amendments, and filed-record conflicts. https://ndlegis.gov/cencode/t10c32-1.pdf (accessed 2026-07-27)
• N.D.C.C. § 10-32.1-20 — formation, articles, and membership timing. https://ndlegis.gov/cencode/t10c32-1.pdf (accessed 2026-07-27)
• N.D.C.C. §§ 10-32.1-23 to 10-32.1-24 — no automatic member agency and statements of authority. https://ndlegis.gov/cencode/t10c32-1.pdf (accessed 2026-07-27)
• N.D.C.C. § 10-32.1-27 — initial and later member admission. https://ndlegis.gov/cencode/t10c32-1.pdf (accessed 2026-07-27)
• N.D.C.C. §§ 10-32.1-30 to 10-32.1-31 — economic defaults and distribution solvency. https://ndlegis.gov/cencode/t10c32-1.pdf (accessed 2026-07-27)
• N.D.C.C. § 10-32.1-39 — management, voting, amendment, and approval defaults. https://ndlegis.gov/cencode/t10c32-1.pdf (accessed 2026-07-27)
• N.D.C.C. §§ 10-32.1-41 to 10-32.1-42 — duties and information rights. https://ndlegis.gov/cencode/t10c32-1.pdf (accessed 2026-07-27)
• N.D.C.C. § 10-32.1-44 — transfer of economic rights without management. https://ndlegis.gov/cencode/t10c32-1.pdf (accessed 2026-07-27)
• N.D.C.C. § 10-32.1-50 — dissolution and oppression remedies. https://ndlegis.gov/cencode/t10c32-1.pdf (accessed 2026-07-27)