| Under Hawaii's Uniform Limited Liability Company Act, | | | | An operating agreement can be used to override such |
| there are default rules that become applicable should | | | | default rules so that only a majority of the members' |
| your Hawaii limited liability company fail to have a | | | | consent is required for the aforementioned matters |
| Hawaii operating agreement in effect. Some of those | | | | rather than unanimity. If you have three or more |
| default rules may prevent the company from taking | | | | members, you probably need an agreement because |
| significant action due to strict unanimity requirements, | | | | obtaining unanimity is easier said than done. |
| especially if the company has a large membership. | | | | Furthermore, each Hawaii limited liability company's |
| This is why it is important to have an operating | | | | situation may be different, so the agreement should be |
| agreement that will have rules tailored to your needs | | | | carefully crafted to each circumstance. |
| rather than be subject to Hawaii's default rules. | | | | Finally, it should be noted that despite the flexibility that |
| For example, Hawaii Revised Statutes Section | | | | an operating agreement can provide for your |
| 428-404(c) specifically provides that certain matters of | | | | company, Hawaii Revised Statutes Section 428-103(b) |
| a limited liability company's business require the consent | | | | places some limitations on what the agreement can |
| of all the members. Some of those matters include the | | | | do. An operating agreement may not: |
| following: | | | | (1) unreasonably restrict a right to information or |
| (1) amendments to the operating agreement; | | | | access to records; |
| (2) amendments to the articles of organization; | | | | (2) eliminate the duty of loyalty; |
| (3) admission of a new member; | | | | (3) unreasonably reduce the duty of care; and |
| (4) making interim distributions; | | | | (4) eliminate the obligation of good faith and fair dealing, |
| (5) use of the company's property to redeem an | | | | but the operating agreement may determine the |
| interest subject to a charging order; | | | | standards by which the performance of the obligation |
| (6) compromising among members, an obligation of a | | | | is to be measured, if the standards are not manifestly |
| member to make a contribution or return money or | | | | unreasonable. |
| other property paid or distributed in violation of this | | | | However, even with respect to the aforementioned |
| chapter; | | | | provisions, the agreement can set limitations and |
| (7) merging the company with another entity; | | | | standards. |
| (8) consent to dissolve the company; and | | | | Therefore, you should seek consultation with a Hawaii |
| (9) selling, leasing, exchanging, or otherwise disposing of | | | | attorney experienced in corporate law so that you can |
| all, or substantially all, of the company's property with or | | | | obtain an operating agreement that is structured for |
| without goodwill. | | | | your company's needs. |