N.Y. Limited Liability Company Law § 417: Operating agreement

§ 417. Operating agreement. (a) Subject to the provisions of this

chapter, the members of a limited liability company shall adopt a

written operating agreement that contains any provisions not

inconsistent with law or its articles of organization relating to (i)

the business of the limited liability company, (ii) the conduct of its

affairs and (iii) the rights, powers, preferences, limitations or

responsibilities of its members, managers, employees or agents, as the

case may be.

The operating agreement may set forth a provision eliminating or

limiting the personal liability of managers to the limited liability

company or its members for damages for any breach of duty in such

capacity, provided that no such provision shall eliminate or limit:

(1) the liability of any manager if a judgment or other final

adjudication adverse to him or her establishes that his or her acts or

omissions were in bad faith or involved intentional misconduct or a

knowing violation of law or that he or she personally gained in fact a

financial profit or other advantage to which he or she was not legally

entitled or that with respect to a distribution the subject of

subdivision (a) of section five hundred eight of this chapter his or her

acts were not performed in accordance with section four hundred nine of

this article; or

(2) the liability of any manager for any act or omission prior to the

adoption of a provision authorized by this subdivision.

(b) The operating agreement of a limited liability company may be

amended from time to time as provided therein; provided, however, that,

except as otherwise provided in the operating agreement or the articles

of organization, without the written consent of each member adversely

affected thereby, (i) no amendment of the operating agreement or (ii) to

the extent any provision concerning (A) the obligations of any member to

make contributions, (B) the allocation for tax purposes of any items of

income, gain, loss, deduction or credit, (C) the manner of computing the

distributions of any member or (D) the compromise of an obligation of a

member to make a contribution is contained in the articles of

organization, no amendment of such provision in the articles of

organization, shall be made that (i) increases the obligations of any

member to make contributions, (ii) alters the allocation for tax

purposes of any items of income, gain, loss, deduction or credit, (iii)

alters the manner of computing the distributions of any member or (iv)

allows the obligation of a member to make a contribution to be

compromised by consent of less than all the members.

(c) An operating agreement may be entered into before, at the time of

or within ninety days after the filing of the articles of organization.

Regardless of whether such agreement was entered into before, at the

time of or after such filing, such agreement, may be effective upon the

formation of the limited liability company or at such later time or date

as provided in the operating agreement; provided, however, under no

circumstances shall an operating agreement become effective prior to the

formation of such company.