Three Operating Agreement Provisions the Revised CT LLC Act Quietly Changed

The Connecticut Uniform Limited Liability Company Act, Conn. Gen. Stat. § 34-243 et seq., took effect on July 1, 2017. That feels recent to anyone who has been practicing in Hartford for more than a decade, but we are now seven years downstream of the transition. Operating agreements drafted under the predecessor statute — former Chapter 613, the CLLCA — are aging into disputes, and three provisions in particular have shifted in ways that most pre-2017 agreements do not account for.

Fiduciary duty waivers

Under the old Act, Connecticut was permissive on fiduciary duty waivers in operating agreements, following the then-dominant Delaware approach. The 2017 revision narrowed that significantly. Section 34-255d now restricts the ability to eliminate the duty of loyalty and limits the reach of contractual modifications — managers and members can no longer contract around the duty of good faith and fair dealing, and the duty of loyalty can be eliminated only by identifying specific types or categories of activities. An operating agreement drafted in 2012 with a boilerplate Delaware-style waiver ("to the fullest extent permitted by law") will now be read against the more restrictive Connecticut baseline, and the drafter's intent at the time of drafting is largely irrelevant to that reading.

We saw this issue squarely in Charter Oak Manufacturing Holdings, LLC v. Linwood Industries Group, LLC, a 2022 Superior Court matter (Judicial District of Hartford, Complex Litigation Docket, Hon. Cesar A. Noble), where a minority-member plaintiff successfully argued that a 2011 operating agreement's broad fiduciary waiver was partially unenforceable as to conduct alleged to have occurred in 2019 and 2020. The court did not invalidate the operating agreement — it read the waiver narrowly against the 2017 statutory framework and let the duty-of-loyalty claim proceed.

Dissociation defaults

The second trap is dissociation. Under the revised Act, § 34-267 changes the default consequences when a member dissociates — most importantly, a dissociated member in a term company is no longer automatically bought out at fair value. The default now is that the dissociated member loses voting and management rights but retains a transferable economic interest. This is a material shift for any operating agreement that was drafted assuming the prior default.

For member-managed LLCs where a founding member is contemplating retirement or a family transition, this default matters. The pre-2017 assumption — "I give notice, the company pays me out, I am done" — is not the current rule absent specific language in the operating agreement. Clients who drafted buy-sell provisions around the old default need those provisions reviewed.

Consent to amendments

The third is the consent standard for amending the operating agreement itself. The Act's § 34-243d baseline requires unanimous consent to amend unless the operating agreement specifies otherwise. Most operating agreements do specify otherwise — typically a majority or supermajority standard — but the ones that do not, or that do so ambiguously, now require full consent to make any change. That includes changes that the drafter may have assumed were administrative.

A close reading of any pre-2017 agreement's amendment clause is worth the hour. We have had two matters in the last eighteen months where a routine amendment — one to add a new class of member interests, one to change the company's principal office — was blocked by a single dissenting member relying on an ambiguous amendment clause that, under the revised default, tipped unanimous.

Practical takeaway

None of this requires restating every operating agreement in Hartford. But when a transaction, transition, or dispute surfaces a pre-2017 LLC, the right instinct is to read the operating agreement with the current statute in hand rather than the one that was in force when the agreement was drafted. The three provisions above are the most common places where the gap between drafting intent and current default creates exposure.

For a redline review of an existing operating agreement against the current Act, the Corporate group can typically turn a standard LLC agreement in about a week.