LLC Operating Agreement Requirements in Utah
At a glance
| Governing law and document name | Utah Revised Uniform Limited Liability Company Act, Title 16, Chapter 20; “operating agreement” includes sole-member terms (§ 16-20-101(16)) |
|---|---|
| Required or optional | Optional; agreement governs covered internal matters and the Act supplies the fallback for matters it does not address (§ 16-20-107(1)-(2)) |
| Permitted form and signatures | Oral, implied, in a record, or combined; includes sole member. Definition imposes no general agreement-level signature, witness, acknowledgment or notary formality (§ 16-20-101(16)) |
| Adoption timing and effect | Prospective initial members, including one prospective sole member, may set terms before formation; terms become the agreement when LLC forms. Act sets no general adoption deadline (§§ 16-20-108(3), -201(4)) |
| Single member and assent | Sole-member terms recognized; LLC is bound without separate assent, and new members are deemed to assent (§§ 16-20-101(16), -108) |
| Management and authority defaults | Member-managed unless agreement uses manager-management language; equal rights, member-majority ordinary decisions, unanimity for outside-course acts. Membership alone creates no agency; filed authority statement may grant/limit outsider-facing authority (§§ 16-20-301 to -302, -407) |
| Voting, economic, and transfer defaults | Per-capita management; equal interim distributions; later admission ordinarily needs all members. Transfer gives distributions, not management or ordinary information rights (§§ 16-20-401(3), -404(1), -407(2)-(3), -502(1)-(2)) |
| Nonwaivable rules and duties | Good faith cannot be eliminated; duty tailoring is subject to statutory unconscionability, public-policy, bad-faith, reckless/intentional misconduct and knowing-violation limits. Information, member-action, dissolution, winding-up, filing and nonparty protections remain (§§ 16-20-107(3)-(5), -409 to -410, -701(4)-(5)) |
| Amendment, filing, and records | Default amendment needs every member; outsider approvals/conditions are effective. Agreement governs internally over conflicting filing, while reasonably relying outsider may use filed record. Certificate is public formation record (§§ 16-20-109(1), (4), -201, -407(2)(f), (3)(c)(iii)) |
Requirements one by one
Current act and optional agreement
Utah's Revised Uniform Limited Liability Company Act now appears in Title 16, Chapter 20. An operating agreement governs member relations, manager duties, company affairs, and its own amendment method. Where it does not address a covered matter, the Act supplies the rule. The definition includes agreements of a sole member. Utah Code § 16-20-107(1)-(2); Utah Code § 16-20-101(16); 2026 S.B. 40 § 297.
Form and signatures
An agreement may be oral, implied, in a record, or any combination. The statutory definition imposes no general signature, witness, acknowledgment, or notarization formality for the agreement itself. Particular transactions can have separate formalities. Utah Code § 16-20-101(16).
Adoption and assent
Prospective initial members, including a prospective sole member, may set terms before formation; those terms become the operating agreement on formation. The LLC is bound by the agreement without separately manifesting assent, and a person who becomes a member is deemed to assent. Formation itself requires an effective certificate and at least one member. Utah Code § 16-20-108; Utah Code § 16-20-201(1), (4).
Management and outsider authority
The LLC defaults to member management unless the agreement uses manager-management language or similar words. Members have equal management rights; a majority decides an ordinary-course difference and all members must approve an outside-course act. In a manager-managed LLC, the manager or manager majority ordinarily decides company matters, while outside-course acts still require all members. Utah Code § 16-20-407(1)-(3).
Membership alone does not make a person the LLC's agent. A separate filed statement of authority can grant or limit the power of a person or position as to nonmembers. Utah Code §§ 16-20-301 to -302.
Voting, economics, and transfer
Equal management rights and equal interim distributions are separate defaults. After formation, a new member joins under the agreement, a qualifying entity transaction, all-member consent, or the no-member continuation provision. A transferee of an interest receives assigned distributions without automatically receiving management or ordinary information rights. Utah Code §§ 16-20-401(3), -404(1), -407(2)-(3), -502(1)-(2).
Protected duties and rights
The agreement cannot eliminate the contractual duty of good faith or relieve bad faith, willful misconduct, or recklessness. The Act permits specific loyalty and care changes within its unconscionability, public-policy, intentional-misconduct, and knowing-violation limits. It also protects information rights, member actions, dissolution grounds, filing rules, and nonparty rights. Utah Code § 16-20-107(3)-(5); Utah Code § 16-20-409(1)-(4), (9); Utah Code § 16-20-410(9); Utah Code § 16-20-701(4)-(5).
Amendment, filings, and records
Both management forms default to amendment with every member's approval. A required outsider approval or condition must also be satisfied. The certificate of organization is the public formation filing. If an effective filed record conflicts with the agreement, the agreement governs members, former members, transferees, and managers; a reasonably relying outsider may use the filed record. Utah Code §§ 16-20-109(1), (4), -201, -407(2)(f), (3)(c)(iii).
What trips people up
- Equal votes in management and equal interim distributions are separate statutory defaults. Utah Code §§ 16-20-404(1), -407(2)(b)-(c).
- Membership alone does not confer agency toward outsiders. Utah Code § 16-20-301(1).
- The October 1, 2026 recodification changed the operative citations to Title 16. 2026 S.B. 40 § 297.
Common questions
Can a Utah LLC have an oral operating agreement?
Yes. Utah Code § 16-20-101(16) expressly includes oral and implied agreements.
Does a later member need to sign the agreement?
The Act deems a person who becomes a member to assent; the definition itself imposes no general agreement signature formality. Utah Code §§ 16-20-101(16), -108(2).
Does an interest transfer carry voting rights?
The transfer alone gives distributions, without management or ordinary information rights. Utah Code § 16-20-502(1)-(2).
Statutes and sources
- Utah Code §§ 16-20-101, -107 to -109, -201, -301 to -302, -401, -404, -407, -409 to -410, -502, and -701; 2026 S.B. 40 § 297. Official enrolled S.B. 40, accessed October 1, 2026. Bracketed words in the enacted text mark deleted prior language; unbracketed replacements govern.
Source links
Every statute quoted above, linked, with the date we checked it.
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