Maryland lets an LLC operating agreement be unwritten unless the Articles of Organization require otherwise, and the LLC itself does not have to sign the agreement to be bound by it. All initial members must agree to the operating agreement, so putting those terms in writing gives the owners a clear record of management authority, voting rights, and economic interests.
Choose the version that matches your Maryland LLC structure.
Is an Operating Agreement Required in Maryland?
No. Maryland forms an LLC through Articles of Organization filed with the Department of Assessments and Taxation. The LLC statute allows members to make an operating agreement, but it does not make one a condition of formation.
The operating agreement is also not filed with the state, and Maryland’s LLC statute does not require notarization. If you are still forming the company, the Maryland Business Express registration guide explains the state registration process separately from the company’s internal agreement. SDAT’s current Articles of Organization instructions list a $100 filing fee for formation.
Maryland Operating Agreement Definition Under State Law
“Operating agreement” means the agreement of the members and any amendments thereto concerning the matters described in § 4A-402(a) of this title.
Maryland gives that agreement unusually broad room to govern the LLC. Under § 4A-402, members may use it to establish how the business is managed, how earnings and assets are shared, how interests may be assigned, and how new members are admitted, as long as the terms are not inconsistent with the Articles of Organization.
Unless the Articles of Organization specifically say otherwise, Maryland permits an operating agreement that is not in writing. Certain consents and amendments still have separate writing requirements under the statute.
The agreement may give exclusive authority to manage, control, and operate the LLC to people who are not members.
The LLC itself does not have to execute the agreement, and a properly adopted agreement binds members and assignees even if they did not personally sign it.
Maryland LLC Default Rules When a Subject Is Left Open
These are Maryland rules that can matter when the agreement leaves a subject open.
Votes follow each member’s share of the LLC’s profits, not one vote per person. Ordinary business decisions require a majority of the profit interests.
§ 4A-403Profits and losses are allocated according to each member’s capital contribution value. Distributions then follow the members’ rights to share in profits.
§ 4A-503If the agreement gives no admission procedure, a person acquiring an interest directly from the LLC needs unanimous member consent to become a member.
§ 4A-601A member may withdraw before dissolution by giving at least six months’ written notice, unless the members agreed otherwise. The operating agreement may restrict or prohibit withdrawal.
§ 4A-605By default, only the economic interest is assignable. The assignee does not automatically become a member or receive voting and other noneconomic rights.
§ 4A-603If the agreement gives no amendment procedure, every member must agree. An amendment adopted without unanimous member consent must be evidenced by a signed writing.
§ 4A-402(c)Maryland also uses different approval thresholds for unusually important actions. Under Maryland Code § 4A-403, selling substantially all company property, approving a merger, or approving a conversion generally requires members holding at least two-thirds of the profit interests, while matters such as a voluntary bankruptcy filing require unanimous consent unless the operating agreement validly changes the consent rule.
