A limited liability company’s operating agreement consists of any agreement, written or oral, between all of the members as to the company’s affairs and the conduct of its business in a manner not inconsistent with law or the articles of organization or, in the case of a foreign limited liability company, all documents that serve a like function under the laws of the jurisdiction in which the foreign limited liability company is organized. The operating agreement may be nothing more than an agreement between all the members to organize a limited liability company.
The power to adopt, alter, amend, or repeal the operating agreement is vested in the members. The articles of organization or a written operating agreement may prescribe the manner in which the operating agreement may be altered, amended, or repealed. If one or more provisions of a written operating agreement conflict with any provision of the articles of organization, the articles of organization will control.
The term “bylaws” is used to designate those regulations that, as one of its legal incidents, a corporation is empowered to make for its internal government and to regulate conduct and prescribe the rights and duties of its members toward itself and among themselves in reference to management of its affairs, including such matters as the management of its property and the transfer of its shares of stock.
Corporations are empowered to adopt, amend, or repeal bylaws. Because a corporation has the inherent power to adopt bylaws, and this inherent right, in the absence of some positive legislative restriction, is incident to every corporation, it can hardly be said that the California Corporate Code does more than recognize this inherent power, for there is no positive requirement that bylaws must be adopted. In the absence of the adoption of bylaws, the authority to perform acts that may be controlled by them is vested in the board of directors.
For your convenience, we have provided a sample of a previous By Laws we drafted for a client.