Updated April 15, 2022
A Hawaii multi-member LLC operating agreement is a legal document that is designed for use by entities with more than one member. The document creates an agreement between all managing members with regard to the company’s policies and procedures. The agreement would be binding once the document is completed and signed by all members in the presence of a notary public.
The state of Hawaii does not require that businesses have an operating agreement in place. However, any business that decides against the implementation of the document is essentially placing at risk all members’ personal assets and property. It is this document that separates the member’s private assets from the business, therefore protecting the members from legal liability in the event of litigation or bankruptcy. The absence of the document would also deny the company and its members the tax benefits to which they are rightfully entitled.
Members are advised to review the document to be certain that the language is clear. Should the members find that assistance is required, they may wish to arrange a consultation with a knowledgeable attorney.