1. Formation
The Company was formed under the Hawaii Uniform Limited Liability Company Act (the "Hawaii LLC Act"), Hawaii Revised Statutes Chapter 428, upon the filing of Articles of Organization with the Hawaii Department of Commerce and Consumer Affairs, Business Registration Division. The principal office of the Company is located at [[Principal Office Address, City, Hawaii ZIP]]. The registered agent is [[Registered Agent Name and Address in Hawaii]].
2. Purpose
The purpose of the Company is to engage in any lawful business or activity for which limited liability companies may be organized under the Hawaii LLC Act and to engage in any and all activities necessary or incidental thereto, including but not limited to [[Primary Business Purpose, e.g., real estate investment, consulting services, product development]].
3. Term
The term of the Company shall continue until dissolved in accordance with this Agreement or the Hawaii LLC Act.
4. Members, Capital Contributions, and Percentage Interests
The initial Members, their capital contributions, and Percentage Interests are set forth in Exhibit A attached hereto and incorporated by reference. Additional Members may be admitted only upon unanimous written consent of the existing Members and execution of a joinder agreement or amendment to this Agreement and Exhibit A.
- Capital contributions shall be made in cash, property, or services as agreed and reflected in the Company's books and records.
- No Member shall be required to make additional capital contributions unless approved by the required vote.
- Capital accounts shall be maintained in accordance with Treasury Regulation §1.704-1(b)(2)(iv) (the "704(b) rules").
5. Management and Voting
The Company shall be [[Member-managed / Manager-managed]].
If member-managed:
- Management and control of the Company shall be vested in the Members.
- Except for matters requiring a higher vote under this Agreement or the Hawaii LLC Act, decisions shall be made by a majority of the Percentage Interests of the Members.
- The following actions require the affirmative vote or written consent of Members holding at least [[75% or other supermajority]] of the Percentage Interests: (a) sale or encumbrance of substantially all assets; (b) merger, conversion, or domestication; (c) admission of new Members; (d) amendment of this Agreement (except ministerial); (e) voluntary dissolution; (f) incurrence of debt exceeding $[[Threshold Amount]]; (g) entering into contracts outside ordinary course exceeding $[[Threshold]].
If manager-managed, the Manager(s) listed in Exhibit B shall have authority to bind the Company in ordinary course matters, with reserved matters requiring Member approval as above.
6. Profits, Losses, and Distributions
- Profits and losses shall be allocated among the Members in proportion to their Percentage Interests, subject to special allocations required to comply with 704(b) and the qualified income offset provisions.
- Distributions of cash or other assets shall be made at such times and in such amounts as the Members (or Manager) determine, after reserving for working capital, debts, and anticipated expenses. Distributions shall be made in proportion to Percentage Interests unless otherwise agreed in writing.
- Tax distributions shall be made to each Member in an amount sufficient to cover the Member's federal and state income tax liability attributable to the Company's income allocated to that Member, computed at the highest marginal rate.
7. Transfer of Interests; Right of First Refusal; Buy-Sell
- No Member may transfer, assign, pledge, or encumber all or any part of the Member's interest without the prior written consent of the other Members, except as provided herein.
- Any proposed transfer to a non-Member shall first be offered to the Company and then the other Members on a pro-rata basis at the same price and terms pursuant to a right of first refusal (ROFR). The offering Member shall provide written notice including all material terms.
- In the event of a deadlock on a major decision, any Member may initiate a buy-sell process (shotgun or Texas Shootout style) as detailed in Exhibit C.
- Upon the death, incapacity, bankruptcy, or withdrawal of a Member (a "Triggering Event"), the remaining Members or the Company shall have the option to purchase the affected interest at fair market value determined by agreement or independent appraisal, subject to the terms in Exhibit D.
8. Tax Matters and Elections
- The Company shall be treated as a partnership (or disregarded entity if single member) for federal and state income tax purposes unless the Members elect otherwise.
- The Members may elect S corporation status under Internal Revenue Code §1362 if eligible, or any other permitted election. The tax matters partner or partnership representative (as applicable under current law) shall be [[Name of Tax Matters Partner]] or successor designated by majority vote.
- The Company shall maintain capital accounts and comply with all 704(b) safe harbor requirements, including qualified income offset, minimum gain chargeback, and curative allocations as necessary.
9. Indemnification and Liability
- The Company shall indemnify and hold harmless each Member, Manager, officer, and agent to the fullest extent permitted by the Hawaii LLC Act against any and all losses, claims, damages, liabilities, and expenses (including reasonable attorneys' fees) arising out of or relating to the Company's business, except for acts or omissions involving gross negligence, willful misconduct, bad faith, or breach of fiduciary duty.
- No Member or Manager shall be personally liable for the debts, obligations, or liabilities of the Company solely by reason of being a Member or Manager.
10. Fiduciary Duties; Conflicts
Members and Managers owe fiduciary duties of loyalty and care to the Company and the other Members as provided by the Hawaii LLC Act and applicable case law. A Member or Manager may engage in other business activities, including competing activities, provided that the Member or Manager does not use Company confidential information or opportunities without consent and discloses material conflicts.
11. Books, Records, and Reporting
- The Company shall maintain complete and accurate books and records at the principal office or such other place as the Members designate. Each Member shall have reasonable access during normal business hours.
- Annual financial statements shall be prepared and distributed to Members within [[90]] days after the end of each fiscal year. The fiscal year shall be the calendar year unless otherwise determined.
- Tax returns (Form 1065 or equivalent) shall be prepared and provided to Members with K-1s in sufficient time for filing.
12. Withdrawal, Dissociation, and Dissolution
- A Member may withdraw only as permitted by this Agreement or the Hawaii LLC Act. Wrongful withdrawal may give rise to damages.
- The Company shall dissolve upon: (a) the written consent of all Members; (b) entry of a decree of judicial dissolution; (c) the occurrence of an event making it unlawful to carry on the business; or (d) upon the sale of substantially all assets and distribution of proceeds.
- Upon dissolution, assets shall be liquidated, liabilities paid, and remaining proceeds distributed to Members in accordance with positive capital account balances after allocations, then in accordance with Percentage Interests.
13. Representations and Warranties
Each Member represents that: (a) the Member has full power and authority to enter this Agreement; (b) the Member is acquiring the interest for the Member's own account for investment; (c) the Member has adequate means to bear the economic risk; and (d) the Member has received or had access to all information the Member deems necessary.
14. Confidentiality
The Members shall keep confidential all non-public information relating to the Company, its business, finances, customers, and operations, except as required by law, regulation, or legal process, or with prior written consent.
15. Miscellaneous Provisions
- Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Hawaii, without regard to conflicts of law principles. The Hawaii LLC Act shall control to the extent not varied by this Agreement.
- Venue. Any legal action shall be brought exclusively in the state or federal courts located in [[Honolulu County or appropriate county]], Hawaii.
- Entire Agreement. This Agreement, including all Exhibits, constitutes the entire agreement among the parties and supersedes all prior agreements, understandings, and negotiations.
- Amendments. This Agreement may be amended only by a written instrument signed by Members holding the required voting percentage for the amendment.
- Severability. If any provision is held invalid or unenforceable, the remaining provisions shall continue in full force and effect.
- Counterparts; Electronic Signatures. This Agreement may be executed in counterparts and by electronic signature, each of which shall be deemed an original.
- Notices. All notices shall be in writing and delivered by certified mail, overnight courier, or email with confirmation to the addresses in Exhibit A or such other address as a party designates in writing.
- No Third-Party Beneficiaries. This Agreement is solely for the benefit of the Members and the Company.
16. Single-Member Provisions (If Applicable)
If at any time there is only one Member, references to "Members" in the plural shall be interpreted to refer to the sole Member, voting and consent requirements shall be satisfied by the sole Member's action, and the sole Member shall have full authority to manage and bind the Company. The sole Member shall maintain separateness, avoid commingling of assets, and observe formalities sufficient to support the liability shield.
Signatures
IN WITNESS WHEREOF, the Members have executed this Hawaii LLC Operating Agreement as of the date first written above.
MEMBER 1:
[[Member 1 Full Legal Name]]
Signature: ______________________________________________
Printed Name: [[Member 1 Signatory Name]]
Date: ________________
MEMBER 2:
[[Member 2 Full Legal Name]]
Signature: ______________________________________________
Printed Name: [[Member 2 Signatory Name]]
Date: ________________
[Additional signature blocks for each Member as needed]
Exhibit A - Members, Capital Contributions, and Percentage Interests
| Member Full Legal Name | Capital Contribution (Cash/Property/Services) | Percentage Interest | Address for Notices / Email |
|------------------------|-----------------------------------------------|---------------------|-----------------------------|
| [[Member 1 Name]] | $[[Amount or description]] | [[XX]]% | [[Address, Email]] |
| [[Member 2 Name]] | $[[Amount or description]] | [[XX]]% | [[Address, Email]] |
| [[Additional Members]]| [[...]] | [[...]]% | [[...]] |
Total Percentage Interests: 100%
Exhibit B - Managers (If Manager-Managed)
Initial Manager(s): [[Manager Name(s)]]
Authority limits and compensation: [[Describe or "as determined by Members"]]
Exhibit C - Buy-Sell / Deadlock Resolution Procedures
[Describe shotgun procedure, appraisal process, payment terms, and closing mechanics in detail sufficient for enforcement.]
Exhibit D - Buyout on Triggering Events
[Detail option periods, valuation methodology (agreed value, formula, or appraisal), payment terms, and security for deferred payments.]
This Hawaii LLC Operating Agreement is a sample template aligned with the Hawaii Uniform Limited Liability Company Act (HRS Chapter 428). It incorporates standard provisions for capital accounts, special allocations under Treas. Reg. §1.704-1(b), transfer restrictions, dissolution mechanics, and single-member variants. It is not legal advice. The Hawaii LLC Act does not require an operating agreement, but one is strongly recommended to override defaults. Members should consult a Hawaii-licensed attorney to customize this Agreement to their specific situation, tax objectives, and any recent amendments to HRS Chapter 428 or federal tax law. Verify current statutes at capitol.hawaii.gov. Information current as of June 2026.
