Step 1 · Ownership and governance framing
LLC fiduciary duties (2026)
LLC managers and managing members may owe fiduciary duties of loyalty and care (plus good faith and fair dealing) under the operating agreement and formation-state LLC act. Who owes what often tracks manager- vs member-managed structure; OAs can modify duties within statute (Delaware and California peers cited). Distinct from corporate director duties, remove-member exits, and charging orders. Overview only — attorney for disputes; no invented case outcomes or 50-state table.
LLC members and managers may owe fiduciary duties of loyalty and care (plus good faith and fair dealing) under the operating agreement and formation-state LLC act defaults — distinct from pasting corporate director duties onto an LLC, from the remove-member / buyout execution map, and from a creditor charging order. Who owes what often tracks manager- vs member-managed structure; many statutes let the OA modify duties within limits. High-stakes overview only — attorney for disputes; Formation Lane does not invent case outcomes or a 50-state duty table.
Neighbor desks (process / concept maps, not dispute strategy): Manager-managed vs member-managed LLC · Operating agreement basics · LLC indemnification · LLC voting rights · Operating agreement vs articles · Remove a member from an LLC · Buy-sell agreement for an LLC · Transfer LLC ownership · LLC charging order · Close the LLC vs sell membership · Single-member vs multi-member LLC · LLC vs corporation · After you form an LLC. Home-state walkthroughs: the 50-state formation index.
Short version for 2026: confirm who manages → read formation-state loyalty / care / good-faith text → read OA duty and waiver clauses → keep remove-member, buy-sell, transfer, and charging-order desks separate → counsel before you rely on “no duty” folklore. Formation Lane does not invent waiver language, expulsion remedies, or case holdings.
Before you rely on fiduciary-duty folklore
Separate statute + OA framing from a dispute strategy and from neighbor ownership desks.
- Clear management structure: member-managed vs manager-managed (articles + OA + how the company actually runs)
- Formation-state LLC act section on standards of conduct / fiduciary duties / good faith and fair dealing (official text)
- Note any statutory limits on expanding, restricting, or eliminating duties in the operating agreement — without inventing missing language
- Current operating agreement: loyalty, care, conflicts, competition, opportunity, indemnification, exculpation, consent / disclosure for interested deals
- Ownership chart and capital / voting schedules that match the books
- Neighbor path named honestly: voluntary exit vs contested expulsion vs creditor charging order vs dissolve — not one “duty” click
- Attorney licensed for the dispute lined up before you rely on a waiver, refuse information, or force an exit based on a publisher page
What are LLC fiduciary duties?
In many formation-state LLC acts (and Uniform model text), people who manage the company — members in a member-managed LLC, or managers in a manager-managed LLC — owe fiduciary duties of loyalty and care, plus good faith and fair dealing. Who owes whom is statute plus operating agreement. Concept map only — not a lawsuit playbook or 50-state duty table.
Five steps to map a fiduciary-duty question before a dispute escalates:
- Confirm management structure and who acts for the LLC. Member-managed vs manager-managed usually changes who owes loyalty and care under model and many state acts. Check articles, the operating agreement, and how the company actually runs. Desk map: manager-managed vs member-managed LLC.
- Read the formation-state LLC fiduciary / standards-of-conduct section. Open the official LLC act text on duties of loyalty and care, good faith and fair dealing, and any rules about expanding, restricting, or eliminating duties in the operating agreement. Uniform acts are models — enacted state text controls. California Corp. Code § 17704.09 and Delaware 6 Del. C. § 18-1101 are citeable peers, not a national default.
- Read the operating agreement duty and waiver language. Find fiduciary, loyalty, care, conflict, competition, corporate-opportunity, indemnification, and exculpation clauses. Note consent or disclosure procedures for interested transactions. Do not invent waiver language from this publisher page.
- Separate neighbor desks honestly. Voluntary exit / buyout / contested expulsion: remove-member-from-llc. Planning triggers: buy-sell. Creditor lien on distributions: charging order. Ownership transfers: transfer-llc-ownership. Fiduciary framing is not a substitute for those process maps.
- Talk to counsel before relying on waiver or “no duty” folklore. High-stakes law. Bring the statute, the operating agreement, the ownership chart, and the disputed facts to an attorney licensed for the matter. Formation Lane is a publisher only.
Neighbor maps for step 4: Remove a member · Buy-sell agreement · Charging order · Transfer LLC ownership · LLC indemnification. None of those pages replaces the fiduciary statute or the operating agreement.
DIY or a formation shop. The walkthrough on this page is for keeping the operating agreement, membership schedules, and management structure with your company binder and reading your formation-state LLC act on the official legislature / code site. If you would rather pay a shop to handle the filing paperwork, compare these:
| Service | Best for |
|---|---|
| Swyft Filings | Fast online filing with compliance reminders |
| Bizee | Budget-minded formation packages |
| Zenind | Formation bundled with registered agent |
| MyCompanyWorks | Simple, no-frills formation filing |
| MyCorporation | LLC formation plus DBA, EIN and registered agent add-ons |
| CorpNet | Formation packages with a year of registered agent and EIN bundled |
| BizFilings | Established filing service (Wolters Kluwer) |
| doola | Non-US founders forming a US LLC |
| Harbor Compliance | Registered agent and multi-state compliance |
| Business Anywhere | Registered agent + virtual business mailbox |
| ZenBusiness | All-in-one formation packages |
Prices, registered agent renewals, and checkout traps side by side: LLC formation services compared by fit.
Who usually owes fiduciary duties — members or managers?
It usually tracks manager-managed vs member-managed structure. In a member-managed LLC, managing members typically owe loyalty and care; in a manager-managed LLC, those duties typically sit with the managers, and non-managing members often do not owe the same package merely by holding an interest — though controlling members and OA text still matter. Confirm your statute; invent no national rule.
| Concept | Typical framing under many LLC acts | Do not assume from this page |
|---|---|---|
| Duty of loyalty | Account for company property / profits / opportunities; avoid adverse dealing and competing with the company while managing (model / RULLCA-style lists vary) | That every state uses the identical loyalty laundry list or that loyalty never applies to a controlling member |
| Duty of care | Often framed as a standard of conduct in managing (model acts and states differ — some use gross negligence / recklessness / intentional misconduct language) | That corporate “business judgment” case law automatically copies onto every LLC |
| Good faith and fair dealing | Contractual obligation that often survives even when fiduciary duties are restricted — Delaware § 18-1101 expressly preserves the implied covenant | That “good faith” means the same thing, or has the same remedies, in every state |
| Who owes | Often managers in manager-managed LLCs; managing members in member-managed LLCs | That non-managing members never owe duties anywhere, or that SMLLCs never raise duty questions |
| OA modification | Many statutes allow expansion / restriction / (in some states) elimination of fiduciary duties within limits | That a boilerplate waiver is enforceable in every formation state |
Indemnity and advancement of defense costs are a separate OA / statute desk — LLC indemnification — not a substitute for reading who owes loyalty and care.
Can the operating agreement change or eliminate fiduciary duties?
Often yes within statutory limits — and those limits vary by state. Delaware expressly allows the LLC agreement to expand, restrict, or eliminate fiduciary duties, but not the implied covenant of good faith and fair dealing. Other states limit loyalty/care modification more tightly (e.g. “manifestly unreasonable”). Read OA and statute with counsel — Formation Lane does not draft waiver clauses.
Two official pattern peers (re-checked 6 October 2026; read the live code — amendments happen):
- Delaware (6 Del. C. § 18-1101). States a policy of maximum effect to freedom of contract and enforceability of LLC agreements; allows the LLC agreement to expand, restrict, or eliminate fiduciary duties of members, managers, or other persons; and provides that the agreement may not eliminate the implied contractual covenant of good faith and fair dealing (and may not eliminate liability for a bad-faith violation of that covenant). Separately, § 18-1104 points to law and equity (including fiduciary duties) for cases not provided for in the chapter.
- California (Corp. Code § 17704.09). Codifies loyalty and care for members of a member-managed LLC (and applies those duties to managers, not members, in a manager-managed LLC under the section’s rules); limits loyalty to listed accounting / adverse-interest / competition concepts; frames care as refraining from grossly negligent or reckless conduct, intentional misconduct, or a knowing violation of law; and requires duties and rights to be discharged consistently with the obligation of good faith and fair dealing.
Other states adopt different loyalty/care lists, care standards, and OA-modification limits — or rely more on equity and the agreement. Uniform Law Commission model § 409 is a drafting template, not your binding statute. Confirm on your legislature / code site and with counsel. Do not form in Delaware (or any state) solely for “duty waiver” folklore if you operate elsewhere — home-state compliance still matters. The OA is usually not filed with the SOS — Operating agreement basics.
How is this different from corporate director duties?
Corporate director duties are a different entity stack. LLC duties are shaped by the LLC act plus the operating agreement, and many LLC statutes give more contractual flexibility than classic corporate fiduciary framing. Do not paste “director duty of care” case holdings onto an LLC without counsel. Neighbor comparison: LLC vs corporation.
Boards of directors under corporate statutes and case law are a different stack from LLC managers and managing members under an LLC act plus a private operating agreement. Many LLC statutes give more contractual flexibility on expanding, restricting, or eliminating fiduciary duties than classic corporate framing. That flexibility is not a reason to paste corporate “duty of care” holdings onto an LLC without counsel — or to assume every LLC waiver is enforceable everywhere.
Structure choice still matters for other desks (tax default language, investor expectations, formalities folklore): LLC vs corporation. Voting / consent mechanics inside the LLC are a neighbor governance desk: LLC voting rights.
How do fiduciary duties relate to removing or expelling a member?
Breach of duty (or OA “for cause” language) is sometimes alleged in forced-exit fights — but expulsion or involuntary dissociation is a separate high-stakes process under the OA and statute, not a free SOS button. See Remove a member from an LLC for the exit map (contested expulsion stays attorney). This page invents no expulsion remedies, buyouts, or case outcomes.
| Desk | What it usually is | Relation to fiduciary duties |
|---|---|---|
| Fiduciary duties (this page) | Loyalty / care / good-faith obligations of managers or managing members under statute + OA | Internal governance concept map — attorney for disputes |
| Remove member / buyout / expulsion | OA / redemption / dissociation path; contested expulsion is counsel — see remove-member-from-llc | Duty breach may be alleged as “cause”; still a separate process map |
| Buy-sell / ROFR planning | Contract for future ownership triggers — see buy-sell-agreement-for-llc | Can set exit economics; does not rewrite every fiduciary statute |
| Transfer / assignment of interest | Private sale or gift under OA consent rules — see transfer-llc-ownership | Different path; interested deals can still raise loyalty questions — counsel |
| Charging order | Creditor remedy against a judgment debtor’s interest — see llc-charging-order | Creditor desk, not an internal loyalty claim |
| Indemnification / advancement | OA / statute promise to cover certain liabilities and defense costs — see llc-indemnification | Neighbor OA desk; not the loyalty/care standard itself |
Do not treat a silent handshake, a website title, or a downloaded “template OA” as proof that nobody owes duties — or that every duty is waived. Courts and counsel key off the formation-state LLC act and the written operating agreement. Do not invent case outcomes, expulsion remedies, or a national “Form X” duty waiver from this page.
After you understand the concept
Keep the operating agreement, membership schedules, and management appointments with the company binder. If ownership later changes voluntarily, use the execution maps: Transfer LLC ownership, Add a member, Remove a member. Planning ahead: Buy-sell agreement for an LLC. Creditor framing (not duty strategy): LLC charging order. Inspection desk: Member books and records / inspection rights. First-30-days desk list: After you form an LLC.
Next: the money path. After the governance / operating-agreement review is accepted:
- Get an EIN — free on IRS.gov after the state entity exists
- Open business checking — park operating cash in the LLC’s name
- First brokerage — only if the work needs one
Full first-30-days desk list: After you form an LLC. Setup overview on the setup checklist. Formation shops, if you want one instead of DIY, stay in the callout above.
LLC fiduciary duties FAQ
- What are LLC fiduciary duties?
- In many formation-state LLC acts (and Uniform model text), people who manage the company — members in a member-managed LLC, or managers in a manager-managed LLC — owe fiduciary duties of loyalty and care, plus good faith and fair dealing. Who owes whom is statute plus operating agreement. Concept map only — not a lawsuit playbook or 50-state duty table.
- Who usually owes fiduciary duties — members or managers?
- It usually tracks manager-managed vs member-managed structure. In a member-managed LLC, managing members typically owe loyalty and care; in a manager-managed LLC, those duties typically sit with the managers, and non-managing members often do not owe the same package merely by holding an interest — though controlling members and OA text still matter. Confirm your statute; invent no national rule.
- Can the operating agreement change or eliminate fiduciary duties?
- Often yes within statutory limits — and those limits vary by state. Delaware expressly allows the LLC agreement to expand, restrict, or eliminate fiduciary duties, but not the implied covenant of good faith and fair dealing. Other states limit loyalty/care modification more tightly (e.g. “manifestly unreasonable”). Read OA and statute with counsel — Formation Lane does not draft waiver clauses.
- How is this different from corporate director duties?
- Corporate director duties are a different entity stack. LLC duties are shaped by the LLC act plus the operating agreement, and many LLC statutes give more contractual flexibility than classic corporate fiduciary framing. Do not paste “director duty of care” case holdings onto an LLC without counsel. Neighbor comparison: LLC vs corporation.
- How do fiduciary duties relate to removing or expelling a member?
- Breach of duty (or OA “for cause” language) is sometimes alleged in forced-exit fights — but expulsion or involuntary dissociation is a separate high-stakes process under the OA and statute, not a free SOS button. See Remove a member from an LLC for the exit map (contested expulsion stays attorney). This page invents no expulsion remedies, buyouts, or case outcomes.
- Is a charging order a fiduciary-duty claim?
- No. A charging order is typically a creditor remedy against a judgment debtor’s membership interest (often a lien on distributions). Fiduciary-duty questions are usually internal co-owner / manager obligations. Do not collapse creditor remedies into loyalty claims — different desks, different counsel facts.
- Does single-member vs multi-member change fiduciary analysis?
- A sole member managing their own SMLLC often has fewer classic co-owner loyalty fights — but managers, officers, and multi-member companies still need the statute and OA read carefully. Membership count also shapes banking KYC and default federal tax language — separate desks: Single-member vs multi-member LLC. Do not invent “no duties in a single-member LLC” as a national rule.
- Is this page legal advice on member disputes?
- No. Formation Lane publishes a high-level concept map: what loyalty / care / good-faith framing often means under LLC acts, that who owes what often tracks management structure, that OAs can modify duties within statute, and that disputes belong to counsel. It does not invent case outcomes, waiver language, or a 50-state scoreboard. Talk to an attorney licensed for the facts before you rely on any duty or waiver claim.
What this page does not cover
- Invented case outcomes, waiver playbooks, or a 50-state fiduciary-duty scoreboard.
- Drafting operating-agreement exculpation, indemnification, or “eliminate all duties” clauses — attorney.
- Statutory / OA books-and-records inspection overview — Member inspection rights.
- Litigating member oppression, freeze-outs, books-and-records fights, or derivative claims.
- Promising that Delaware formation, a multi-member OA, or a template waiver makes co-owner disputes impossible.
- Voluntary or contested membership exits — Remove a member from an LLC (expulsion remains an attorney desk on that map).
- Buy-sell planning — Buy-sell agreement for an LLC.
- Creditor charging orders — LLC charging order.
- Acting as anyone’s lawyer, CPA, or filing agent. Formation Lane is a publisher only.
Sources
- Uniform Law Commission — Limited Liability Company Act (2006) (Last Amended 2013) committee / final-act library (model § 409 standards of conduct / fiduciary duties of loyalty and care; enacted state text controls) — as of Re-fetched 6 October 2026 (model act library; enacted state text controls)
- Delaware Code Online — 6 Del. C. § 18-1101 (freedom of contract; LLC agreement may expand, restrict, or eliminate fiduciary duties; may not eliminate implied contractual covenant of good faith and fair dealing) — as of Re-checked on Delaware Code Online 6 October 2026 (text matches; history through 79 Del. Laws, c. 74)
- California Corporations Code § 17704.09 (fiduciary duties of loyalty and care in member-managed LLCs; manager-managed rules; obligation of good faith and fair dealing — RULLCA-style enacted peer) — as of Re-checked on California Legislative Information 6 October 2026 (text matches; amended Stats. 2015, Ch. 775)
- U.S. Small Business Administration — Choose a business structure (LLC overview; operating agreement / ownership framing) — as of Re-fetched 6 October 2026 (URL redirects to counseling/launch-your-business/#business-structure)
- U.S. Small Business Administration — Basic Information About Operating Agreements (internal contract; ownership subjects; not filed with the state) — as of SBA page modified 18 October 2021; re-fetched 6 October 2026 (URL redirects to sba.gov/blog/2016/2016-05/…)