Uniform Limited Liability Company Act (ULLCA)

Unit 8 discussion – Uniform Limited Liability Company

In absence of an operating agreement, dispute in profit and loss sharing are decided by the provision of the Uniform Limited Liability Company Act ULLCA. ULLCA was promulgated in 1994 by the Uniform Law Commission. The ULLCA provides ways through which the aspiration of members regarding the duration and the management structure of the company will be protected. The ULLCA is activated by the required provisions in the article of organization. The article of association is variable.  Apart from the core rules regarding the fiduciary behaviors of managers and members, the rest are simply default rules which members can change in the operating agreement.

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More importantly, an operating agreement can also designate a dispute resolution method. The john, Lesa, and Trevor’s case, they were forced to go through the most expensive route that may drain away their resources. An operating agreement would allow them to choose a simpler and cheap method of dispute resolution, mostly the arbitration. The benefit of the operating agreement in LLC is that, apart from the core rules of LLC, incase of a conflict between the operating agreement and the articles of organization the former takes precedence.


Mancuso, A. (2010). Your Limited Liability Company: An operating manual. New York: Nolo

Miller, R. & Jentz, G. (2009).Fundamentals of business law: Excerpted cases. New York: Cengage Learning. Uniform Limited Liability Company Act (ULLCA).