Single-Member LLC Operating Agreement — Hawaii

Single-Member LLC Operating Agreement (HAWAII)

Quick-Reference Summary

Article I — Formation

1.1 Formation. This Operating Agreement (the "Agreement") of [________________________________], LLC (the "Company"), a Hawaii limited liability company, is adopted and entered into effective as of [__/__/____] (the "Effective Date") by [________________________________] (the "Member" or "Sole Member"). The Company was formed by filing Articles of Organization (Form LLC-1) with the Hawaii Department of Commerce and Consumer Affairs, Business Registration Division, pursuant to HRS § 428-203, as part of the Hawaii Uniform Limited Liability Company Act (the "Act").

1.2 Name. The legal name of the Company is [________________________________], LLC. The name complies with HRS § 428-105 (Hawaii LLC name requirements).

1.3 Principal Office. The Company's principal office is [________________________________].

1.4 Registered Agent for Service of Process. The Company's agent for service of process in Hawaii is [________________________________], with a Hawaii street address (no P.O. box) at [________________________________], as required by HRS § 428-108 (and the Model Registered Agents Act, HRS Chapter 425R, as cross-referenced in HRS § 428-1301(a)(21)).

1.5 Term. The Company shall continue perpetually at will unless dissolved earlier as provided in this Agreement or the Act.

1.6 Operating Agreement Controls. Pursuant to HRS § 428-103, this Agreement governs the relations among the Member, the Company, and any managers, except to the extent § 428-103(b) prohibits variation. Under HRS § 428-203(c), in the event of any conflict between this Agreement and the Articles of Organization, this Agreement controls among members and managers; the Articles control only as to third parties who reasonably rely on them.

Article II — Purpose and Powers

2.1 Purpose. The Company is formed to engage in any lawful business, trade, investment, or activity for which a limited liability company may be organized under HRS § 428-112, and specifically: [________________________________].

2.2 Powers. The Company has all powers granted under HRS § 428-112, including the power to enter into contracts; acquire, hold, lease, encumber, and dispose of real and personal property; borrow money and issue evidences of indebtedness; sue and be sued; conduct business and own property in any jurisdiction; and engage in any lawful activity.

Article III — Member (Sole Member)

3.1 Identification of Sole Member.

3.2 Limited Liability. Pursuant to HRS § 428-303, the Member is not personally liable for any debt, obligation, or liability of the Company solely by reason of being a member or acting as a manager.

3.3 No Salary as Member. The Member is not entitled to compensation for services rendered solely in the capacity of a member, but may receive reasonable compensation under a separate written employment or services arrangement.

3.4 Admission of Additional Members. No additional member may be admitted except upon written consent of the Sole Member, amendment of this Agreement, and compliance with applicable federal and state securities laws.

Article IV — Management

4.1 Management Structure. The Company is ☐ member-managed ☐ manager-managed (check one). Pursuant to HRS § 428-404, in a member-managed company, the Sole Member shall have full and exclusive authority to manage the business of the Company. In a manager-managed company, the initial Manager is [________________________________].

4.2 Authority. The Member (or Manager) is authorized to:

• ☐ Execute contracts, leases, deeds, promissory notes, and other instruments;
• ☐ Open, maintain, and close Company bank, brokerage, and merchant accounts;
• ☐ Hire, supervise, and terminate employees and independent contractors;
• ☐ File tax returns and make tax elections, including GET filings under HRS Ch. 237;
• ☐ Acquire, hold, lease, pledge, and dispose of Company property;
• ☐ Initiate, defend, settle, and compromise legal proceedings;
• ☐ Borrow funds and grant security interests in Company property.

4.3 Standards of Conduct. Pursuant to HRS § 428-409, the Member or Manager shall discharge duties consistent with the duty of loyalty (§ 428-409(b)), the duty of care (§ 428-409(c)), and the obligation of good faith and fair dealing (§ 428-409(d)).

4.4 Indemnification and Insurance. The Company shall indemnify the Member and any Manager to the full extent permitted by HRS § 428-403 and may purchase insurance therefor.

Article V — Capital Accounts and Distributions

5.1 Initial Capital Contribution. The Member's initial contribution of cash, property, or services is described in Exhibit A with an agreed aggregate value of $[____________].

5.2 Additional Contributions. The Member may make additional capital contributions at any time. No additional contributions are required, and pursuant to HRS § 428-402, no member's obligation to contribute may be enforced absent a separate written promise.

5.3 Capital Account. A single capital account shall be maintained for the Member in accordance with Treas. Reg. § 1.704-1(b)(2)(iv) where applicable.

5.4 Distributions — Override of Equal-Shares Default. Notwithstanding the default rule of HRS § 428-405 (which provides for distributions in equal shares regardless of capital contributions), the Member may cause the Company to distribute available cash and property at such times and in such amounts as the Member determines. If additional members are admitted, this Agreement shall be amended before such admission to specify a distribution formula (e.g., pro-rata by ownership percentage or by capital account balances).

5.5 Limitations on Distributions. Distributions are subject to the solvency limitations of HRS § 428-406.

5.6 Tax Allocations. As a single-member LLC, the Company is by default a "disregarded entity" for federal income tax purposes under Treas. Reg. § 301.7701-3, and the Member reports all Company income on the Member's individual federal and Hawaii state returns.

Article VI — Transfer of Interest / Charging Order (HRS § 428-503)

6.1 Nature of Distributional Interest. Pursuant to HRS § 428-501, the Member's distributional interest is personal property and is the Member's only interest that may be transferred separate from governance rights.

6.2 Restrictions on Transfer. The Member shall not sell, assign, pledge, hypothecate, or otherwise transfer all or any part of the Member's interest without (i) compliance with HRS § 428-502, and (ii) all applicable federal and state securities laws.

6.3 Permitted Transfers. The Member may transfer the Member's interest to (a) the Member's revocable living trust; (b) a wholly-owned entity controlled by the Member; or (c) by testamentary disposition or intestate succession.

6.4 Charging Order. Pursuant to HRS § 428-503, on application by a judgment creditor of the Member, a court of competent jurisdiction may charge the distributional interest of the judgment debtor to satisfy the judgment. The court may appoint a receiver of distributions due or to become due to the Member and make all other orders necessary to give effect to the charging order. A charging order constitutes a lien on the Member's distributional interest only. The judgment creditor does not become a member, does not acquire management rights, and is entitled only to distributions, if and when made, until the judgment is satisfied.

6.5 Foreclosure and Redemption. The court may order foreclosure of the lien on the distributional interest. A purchaser at the foreclosure sale has the rights of a transferee only. Before foreclosure, the charged distributional interest may be redeemed by the Member.

6.6 Exemption Laws Preserved. Chapter 428 does not deprive the Member of rights under applicable exemption laws.

6.7 No Forced Dissolution. A charging order or assignment does not, by itself, cause dissolution under HRS § 428-801.

Article VII — Dissolution

7.1 Events of Dissolution. Pursuant to HRS § 428-801, the Company shall dissolve upon the first to occur of:

• ☐ An event specified in this Agreement;
• ☐ Written consent of the Sole Member to dissolve;
• ☐ Dissociation of the Member if the Company has no remaining members within the statutory cure period;
• ☐ Entry of a decree of judicial dissolution under HRS § 428-801(4);
• ☐ Administrative termination by the DCCA under HRS § 428-809;
• ☐ Any event that makes it unlawful to continue.

7.2 Winding Up. Upon dissolution, the Member shall wind up the Company's affairs pursuant to HRS § 428-803, including collecting receivables, paying or providing for known and contingent liabilities, distributing remaining assets to the Member, and filing Articles of Termination under HRS § 428-805.

7.3 Distribution of Assets. Pursuant to HRS § 428-806, Company assets shall be distributed: (i) to creditors, including the Member if a creditor; (ii) to satisfy distributions previously declared; (iii) to the Member for unreturned capital and remaining surplus.

7.4 Continuation Upon Death or Incapacity. Upon the Member's death or incapacity, the Member's personal representative may exercise the Member's rights pursuant to HRS § 428-704 and applicable Hawaii probate law.

Article VIII — State-Specific Provisions

8.1 Annual Report (HRS § 428-1301(a)(8)). The Company shall file an annual report with the DCCA Business Registration Division each year in the calendar quarter containing the anniversary of the Company's date of formation, paying the $25 filing fee (with reduced fee available for online filings per current DCCA guidance). Failure to file results in administrative termination under HRS § 428-1309.

8.2 General Excise Tax (GET) — HRS Chapter 237. Hawaii imposes a General Excise Tax on business activities (NOT a sales tax). The Company shall:

• ☐ File Form BB-1 (Basic Business Application) with the Hawaii Dept. of Taxation and pay the one-time $20 GET license fee;
• ☐ Obtain a Hawaii Tax Identification Number;
• ☐ Collect and remit GET at applicable rates: 0.15% (insurance commissions), 0.5% (wholesaling, manufacturing, producing, wholesale services, use tax on imports for resale), or 4% (most retail / services), plus applicable county surcharges (up to 0.5% in Honolulu, Kauai, Hawaii, and Maui counties);
• ☐ File periodic GET returns (monthly, quarterly, or semi-annually depending on volume) by the 20th day of the month following the close of the tax period;
• ☐ File the annual GET reconciliation return by the 20th day of the fourth month following the close of the taxable year.

8.3 Hawaii Income Tax. If the Company elects C-corporation status, it is subject to Hawaii corporate income tax under HRS Ch. 235. Single-member disregarded entities report income on the Member's Hawaii Form N-11 or N-15 individual return.

8.4 Series LLC — NOT AUTHORIZED. Hawaii HRS Chapter 428 does not authorize Series LLCs or protected series. The Company shall not purport to establish protected series. Asset segregation must be accomplished through separate Hawaii LLCs or parent-subsidiary structures.

8.5 Manager-Managed Election Must Appear in Articles. If the Company is or becomes manager-managed, the Articles of Organization must so state. The Member may not effect a manager-managed election by this Agreement alone (HRS § 428-203).

8.6 Right of First Negotiation / Refusal. If additional members are admitted, the Company shall maintain a Right of First Negotiation and Right of First Refusal in favor of the Company (then the non-selling members) before any transferable interest is sold to a non-affiliate.

8.7 Foreign Qualification. If the Company transacts business in another state, it shall qualify as a foreign LLC. Conversely, a foreign LLC transacting business in Hawaii must obtain a certificate of authority under HRS § 428-1002.

Article IX — General Provisions

9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Hawaii. Internal affairs are governed by HRS Chapter 428.

9.2 Venue. Any dispute arising under this Agreement shall be resolved in the state or federal courts located in [____________] County, Hawaii.

9.3 Amendment. This Agreement may be amended only by a written instrument signed by the Sole Member (or all members then admitted).

9.4 Entire Agreement. This Agreement, together with the Articles of Organization (Form LLC-1) and all exhibits, constitutes the entire agreement governing the Company.

9.5 Severability. If any provision is held invalid or unenforceable, the remaining provisions shall continue in full force and effect.

9.6 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts and by electronic signature (E-SIGN Act, 15 U.S.C. § 7001 et seq.; Hawaii Uniform Electronic Transactions Act, HRS Chapter 489E).

9.7 No Third-Party Beneficiaries. This Agreement is solely for the benefit of the Member and the Company.

Signature Block

IN WITNESS WHEREOF, the undersigned Sole Member executes this Operating Agreement effective as of the date first written above.

Printed name: [________________________________]
Title (if any): [________________________________]

State of Hawaii
County of [____________]

Acknowledged before me this [__/__/____] by [________________________________].

_________________________________
Notary Public
My commission expires: [__/__/____]

Pre-Execution Checklist

• ☐ Articles of Organization (Form LLC-1) filed with Hawaii DCCA Business Registration Division ($50 + $1 archive fee) (HRS § 428-203).
• ☐ Registered agent and Hawaii street address confirmed and current (no P.O. box) (HRS § 428-108; HRS Ch. 425R).
• ☐ Federal EIN obtained from the IRS (Form SS-4).
• ☐ Check-the-box federal tax election filed (Form 8832) if treatment other than disregarded entity is desired.
• ☐ Form BB-1 filed with Hawaii Dept. of Taxation; one-time $20 GET license fee paid; Hawaii Tax ID issued.
• ☐ County surcharge rates confirmed for the county of the Company's principal place of business.
• ☐ Initial capital contribution documented in Exhibit A.
• ☐ Business bank account opened in the Company's name (no commingling).
• ☐ Annual Report calendar reminder set for quarter of formation anniversary each year ($25) (HRS § 428-1301(a)(8)).
• ☐ GET periodic filing schedule established (monthly / quarterly / semi-annual based on volume); annual GET reconciliation deadline calendared (20th day of 4th month after taxable year-end).
• ☐ Beneficial ownership information considered under 31 U.S.C. § 5336 (Corporate Transparency Act).
• ☐ Industry-specific licensing reviewed with DCCA Professional & Vocational Licensing Division as applicable.
• ☐ Right of First Refusal / Right of First Negotiation provisions reviewed in anticipation of any future admission of members.
• ☐ Foreign qualification evaluated in other states where the Company transacts business.
• ☐ Original signed Agreement maintained in Company records book.
• ☐ Member's estate plan / trust updated to reference the membership interest.

Sources and References

• Hawaii Uniform Limited Liability Company Act, HRS Chapter 428: https://law.justia.com/codes/hawaii/title-23a/chapter-428/
• HRS § 428-409 (General standards of conduct): https://law.justia.com/codes/hawaii/title-23a/chapter-428/section-428-409/
• HRS § 428-1301 (Fees, incl. $25 annual report): https://law.justia.com/codes/hawaii/title-23a/chapter-428/section-428-1301/
• HRS Chapter 237 — General Excise Tax (overview): https://tax.hawaii.gov/geninfo/get/
• Hawaii Tax Online (hitax): https://hitax.hawaii.gov/
• DCCA Business Registration Division: https://cca.hawaii.gov/breg/
• Hawaii Business Express (formation portal): https://hbe.ehawaii.gov/BizEx/home.eb
• Form BB-1 (Basic Business Application): https://files.hawaii.gov/tax/forms/2023/bb1_f.pdf
• Tax Facts 37-1, General Excise Tax (GET): https://files.hawaii.gov/tax/legal/taxfacts/tf2025-37-1.pdf
• Treas. Reg. § 301.7701-3 (Check-the-box): https://www.ecfr.gov/current/title-26/section-301.7701-3
• Corporate Transparency Act, 31 U.S.C. § 5336: https://www.law.cornell.edu/uscode/text/31/5336