Rhode Island: LLC Operating Agreement Requirements

Requirements one by one

Governing law and document name

R.I. Gen. Laws § 7-16-1 names the current statute the Rhode Island Limited
Liability Company Act. R.I. Gen. Laws § 7-16-2(23) calls the members' internal
arrangement an operating agreement and defines it as a written or oral
agreement about the LLC's affairs and business.

This current chapter has an enacted end date. 2026 Public Laws Chapter 247
repeals it and installs replacement LLC legislation effective January 1,
2028. The current rules below therefore describe law through December 31,
2027.

Required or optional

An agreement is not a formation condition. Under § 7-16-5, the LLC forms when
the secretary of state accepts the articles and issues the certificate of
organization. Chapter 7-16 then supplies defaults unless the articles or a
valid operating agreement provides another rule.

Permitted form and signatures

R.I. Gen. Laws § 7-16-2(23) recognizes a written or oral agreement. The current Act does
not add a general signature, witness, acknowledgment, or notarization condition.

Writing still matters for particular terms. Manager management under
§§ 7-16-14 and 7-16-15(a), assignment restrictions under § 7-16-35, a different
assignee-admission rule under § 7-16-36, and several dissolution variations
under § 7-16-39(2) require a written agreement. A promised capital contribution
has a separate signed-writing rule under § 7-16-25(a).

Adoption timing and effect

The Act sets no general adoption deadline. R.I. Gen. Laws § 7-16-6(a)(3) contemplates a
written agreement already “made or intended to be made” when the articles state
the intended tax treatment, while § 7-16-5 places legal formation at certificate
issuance. The current Act does not state a separate rule making an agreement
effective before the LLC exists.

Single member and assent

R.I. Gen. Laws § 7-16-2(23) expressly treats a document adopted by a sole member as an
operating agreement and permits one or more nonmember managers to be parties.
Under § 7-16-36(b), an assignee who is admitted as a member takes the member's
rights, powers, restrictions, and liabilities under the articles, agreement,
and Act.

Management and authority defaults

Section 7-16-14 defaults to member management. R.I. Gen. Laws § 7-16-15(a)
allows manager management through the articles or a written operating agreement,
and § 7-16-6(a)(6) requires the
articles themselves to state the management form. Because § 7-16-4(12) bars an
agreement inconsistent with the articles, a private manager clause should match
the public filing. R.I. Gen. Laws § 7-16-12(a)(2) requires an articles amendment when the form
changes or the manager of record changes.

In a manager-managed LLC, § 7-16-20 makes every manager an ordinary-business
agent. A nonmanager member has no statutory agency power unless the articles
provide otherwise. Multiple managers act by majority, one vote each, under
§ 7-16-19 unless the Act, articles, or agreement changes that rule.

Voting, economic, and transfer defaults

Voting tracks capital value, not headcount. R.I. Gen. Laws § 7-16-21(a) gives each
unassigned membership interest a vote in proportion to capital value and uses a
majority of all unassigned capital value for the listed major acts, including
dissolution, a substantially-all-assets transfer, merger, conflict transaction,
and agreement or articles amendment.

R.I. Gen. Laws § 7-16-26 and § 7-16-27 allocate profits, losses, and distributions by
capital value unless the articles or agreement says otherwise. Interim
distributions require unanimous member agreement under § 7-16-28 unless the
operating agreement supplies the rule.

R.I. Gen. Laws § 7-16-35(a) and § 7-16-36(a) separate economics from membership. An assignment
normally transfers distributions only, not management or voting rights.
Admission requires unanimous consent of the other members unless a written
agreement provides a different route.

Nonwaivable rules and duties

Rhode Island's current Act does not collect every protected rule in one list.
Section 7-16-4(12) instead limits operating agreements to terms consistent with
the articles and state law.

R.I. Gen. Laws § 7-16-17(a) and § 7-16-18 let the agreement shape duties and monetary
liability, but § 7-16-18(b) preserves liability for loyalty breaches, acts not in
good faith, intentional misconduct, knowing legal violations, wrongful
distributions, and improper personal benefits. R.I. Gen. Laws § 7-16-31(a) and § 7-16-32(a)
also retain the distribution-solvency test and liability for excess payments.

R.I. Gen. Laws § 7-16-22(a) states member inspection and information rights, while
§ 7-16-40 gives a member access to superior court when carrying on in conformity
with the articles or agreement is not reasonably practicable.

Amendment, filing, and records

Section 7-16-21(b)(5) defaults an agreement amendment to approval by members
holding a majority of all unassigned capital value. A term that falls within a
section requiring a written agreement must remain written.

The operating agreement is not the formation filing. Sections 7-16-5 and
7-16-6 require articles of organization, and § 7-16-4(12) prevents an agreement
from conflicting with those articles. Management-form and manager-of-record
changes trigger an articles amendment under § 7-16-12.

Section 7-16-22 requires the LLC to keep any written operating agreement at its
principal office, along with the articles, ownership and voting records,
proceedings, five years of tax returns and reports, and five years of financial
statements. A member may inspect and copy required records on reasonable request
during ordinary business hours.

What trips people up

Oral does not mean every term can be oral. The definition generally accepts
an oral agreement, but several high-impact variations require a written one.

Manager management is both private and public. The written agreement can
allocate management rights, but the articles must state the form and must be
updated when it changes.

A complete replacement is already enacted, but not yet effective. Current
Chapter 7-16 continues through December 31, 2027. The replacement takes effect
January 1, 2028, so an agreement meant to operate after that date needs another
current-law review.

Common questions

Must every Rhode Island member sign the operating agreement? The current
LLC Act imposes no general signature rule, but a written signed instrument is
required for a promised capital contribution and an agreement may impose its
own execution conditions.

Do percentage interests automatically control? Statutory voting and the
allocation of profits, losses, and distributions follow capital value. An
agreement can choose a different rule within the Act's limits.

Does transferring an interest make the buyer a member? No. The transfer
normally carries only distribution rights; admission requires the route in a
written agreement or unanimous consent of the other members.

When does the new LLC act start? January 1, 2028. Until then, current
Chapter 7-16 remains the governing act.

Statutes and sources

• R.I. Gen. Laws §§ 7-16-1, 7-16-2, and 7-16-4 — Act name, operating-
  agreement definition, company power, and articles/law conflict limit.
  https://webserver.rilegislature.gov/statutes/title7/7-16/7-16-1.htm,
  https://webserver.rilegislature.gov/statutes/title7/7-16/7-16-2.htm, and
  https://webserver.rilegislature.gov/statutes/title7/7-16/7-16-4.htm
  (accessed 2026-07-27)
• R.I. Gen. Laws §§ 7-16-5, 7-16-6, and 7-16-12 — formation, articles,
  contemplated agreements, management-form statement, and article amendments.
  https://webserver.rilegislature.gov/statutes/title7/7-16/7-16-5.htm,
  https://webserver.rilegislature.gov/statutes/title7/7-16/7-16-6.htm, and
  https://webserver.rilegislature.gov/statutes/title7/7-16/7-16-12.htm
  (accessed 2026-07-27)
• R.I. Gen. Laws §§ 7-16-14 to 7-16-21 — management form, manager duties and
  liability, manager action and agency, voting, and amendment approval.
  https://webserver.rilegislature.gov/statutes/title7/7-16/7-16-14.htm,
  https://webserver.rilegislature.gov/statutes/title7/7-16/7-16-15.htm,
  https://webserver.rilegislature.gov/statutes/title7/7-16/7-16-17.htm,
  https://webserver.rilegislature.gov/statutes/title7/7-16/7-16-18.htm,
  https://webserver.rilegislature.gov/statutes/title7/7-16/7-16-19.htm,
  https://webserver.rilegislature.gov/statutes/title7/7-16/7-16-20.htm, and
  https://webserver.rilegislature.gov/statutes/title7/7-16/7-16-21.htm
  (accessed 2026-07-27)
• R.I. Gen. Laws §§ 7-16-22 and 7-16-25 to 7-16-32 — company records,
  signed contribution promises, economic defaults, and distribution limits.
  https://webserver.rilegislature.gov/statutes/title7/7-16/7-16-22.htm,
  https://webserver.rilegislature.gov/statutes/title7/7-16/7-16-25.htm,
  https://webserver.rilegislature.gov/statutes/title7/7-16/7-16-26.htm,
  https://webserver.rilegislature.gov/statutes/title7/7-16/7-16-27.htm,
  https://webserver.rilegislature.gov/statutes/title7/7-16/7-16-28.htm,
  https://webserver.rilegislature.gov/statutes/title7/7-16/7-16-31.htm, and
  https://webserver.rilegislature.gov/statutes/title7/7-16/7-16-32.htm
  (accessed 2026-07-27)
• R.I. Gen. Laws §§ 7-16-35, 7-16-36, 7-16-39, and 7-16-40 — assignment,
  admission, dissolution events, and judicial dissolution.
  https://webserver.rilegislature.gov/statutes/title7/7-16/7-16-35.htm,
  https://webserver.rilegislature.gov/statutes/title7/7-16/7-16-36.htm,
  https://webserver.rilegislature.gov/statutes/title7/7-16/7-16-39.htm, and
  https://webserver.rilegislature.gov/statutes/title7/7-16/7-16-40.htm
  (accessed 2026-07-27)
• 2026 R.I. Public Laws Chapter 247, §§ 2–4 — enacted repeal and replacement
  of current Chapter 7-16, effective January 1, 2028.
  https://webserver.rilegislature.gov/PublicLaws/law26/law26247.htm
  (accessed 2026-07-27)